Research Paper on:
Royal Philips Electronics NV; A Case Study

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position near bankruptcy to a well known brand that is still lacking in performance. To understand the position the company finds itself in we can consider the environment and the  level of power it has in that environment. There have been many attempts at designing models which describe the competitive environment and the determinants of profitability. One of the best  known is now twenty years old, but still seen as one of the most accurate. This is one of the models designed by Michael Porter and published in 1980 (Porter,  1980). His five forces model considers the external macro effects on an organisation in a business environment (Goett, 1999). His five forces model is designed to show how the  external environment can effect the way a business operates, and that any strategy a business undertakes should take these factors into consideration when analysing their position and possible future (DAveni,  1999). In understanding these external forces we will be better placed to deal with them, understanding their combined impact, when they come  to play. The five forces Porter identifies are the existing competitors, the threat of new entrants, substitute products (or services), and the power of purchasers and suppliers (Porter, 1980).  Porter does not see these external factors as working alone, they act in relationship to each other, and can also be influenced by the organisation which the effect, in understanding  them the organisation is in the best position to influence them (Thompson, 1998). This model may be twenty years old, but in seeking to understand its strengths and weaknesses we  can look at each of these forces individually, and the traditional view that accompanies them regarding the different positions. The first element