Management Theories: Analysis of Five Competitive Forces (Local Level)


This is a capstone project lesson plan that emphasizes all aspects of the management theory of business with regards to the five competitive forces (Bargaining Power of Suppliers, Current Rivalry, Threat of New Entrants, Threat of Substitutes, and Bargaining Power of Buyers) at the local level.

If students need more direction on a given aspect of the five competitive forces of management theory, please see the following lesson plans for a more detailed understanding: Five Competitive Forces-Current Rivalry (Local), Five Competitive Forces-Bargaining Power of Suppliers (Local), Five Competitive Forces-Bargaining Power of Buyers (Local), and Five Competitive Forces-Threats from New Entrants and Substitutes (Local).
In this lesson students will create a SWOT analysis in order to analyze the five competitive forces. The five competitive forces are:
1. Current Rivalry: the intensity among rivals increases when industry growth rates slow, demand falls, and product prices descend.
2. Bargaining Power of Suppliers: As supply goes down, the bargaining power of suppliers goes up and vice versa.
3. Bargaining Power of Buyers: The degree to which buyers have the market strength to hold strength to hold sway over and influence competitors in an industry.
4. Threat of New Entrants: The ease or difficulty with which new competitors can enter an industry.
5. Threat of Substitutes: The extent to which switching costs and brand loyalty affect the likelihood of customers adopting substitute products and services.

NBEA Standard(s):
  • Management, II. Management Theories

Lesson Plan Details:

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