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1. You have been appointed as a business manager of
Global Paints Uganda Ltd, which is based along Kampala
road. You have been tasked to increase the market share
and the profit potential of the company.
a) How do Michael Porter's five forces of competition in an
industry affect the market share and profit potential of
Global Paints Uganda Ltd.
b) Describe with examples the importance of Business
Environment Analysis for a business firm.

Respuesta :

jaamacjabiye

Answer: answer me this question

Explanation:

anthougo

a) Michael Porter's five forces of competition affect the profitability and market share of the Global Paints Uganda Ltd. in these ways.

  • For instance, new entrants into the market reduce the market share and profit potential of the company because of increased competition.  Increased competition reduces prices of paint and Global Paints sales revenue.

  • The bargaining power of buyers is increased with increased competition and the entrance of new competitors.  Competitors introduce substitute products through innovation and capital investments.

  • There is an increase in industry rivalry when the industry admits new entrants. The increased rivalry increases the cost of doing business and reduces profitability and market share.

b) Without Business Environment Analysis, Global Paints cannot evaluate the opportunities that it should utilize to increase its market share and growth. Global Paints will not be able to assess the threats that can reduce its competitiveness, market share, and profitability.

Thus, a PESTEL (political, economic, social, technological, environmental, and technological) analysis is important in determining business opportunities and threats.

Learn more about the competitive environment at https://brainly.com/question/21640321

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