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1. Porter's five forces model describes five competitive forces that shape every industry: the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitutes, and industry rivalry. 2. The rise of e-commerce and digital technologies like recommender systems have impacted all five of Porter's forces by reducing barriers to entry, increasing options for suppliers and buyers, and enabling easier comparison of substitutes. 3. Recommender systems can help businesses leverage Porter's model by analyzing supplier efficiency, promoting products over substitutes, and showing customers personalized recommendations to reduce their bargaining power.

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49 views2 pages

Assignment

1. Porter's five forces model describes five competitive forces that shape every industry: the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitutes, and industry rivalry. 2. The rise of e-commerce and digital technologies like recommender systems have impacted all five of Porter's forces by reducing barriers to entry, increasing options for suppliers and buyers, and enabling easier comparison of substitutes. 3. Recommender systems can help businesses leverage Porter's model by analyzing supplier efficiency, promoting products over substitutes, and showing customers personalized recommendations to reduce their bargaining power.

Uploaded by

Fatema Taha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Answer the Following (5 M)

Justify the statement “Recommender system is associated with Porter’s Model “(Hint: Forces
associated with porter’s model, association between Porter’s Model’s forces and recommender
system and application)
 
Before I get into what a recommender system, let me start by discussing what an ebusiness is and
how this recommender system is one of the tools of E-business and E-commerce
 
Electronic business (e - business) is aimed at enhancing the competitiveness of an organization by
deploying ICT throughout an organization and beyond, through links to partners and customers
 
Electric Commerce (E-commerce) is a subset of E-business. E-commerce refers to all the electronic
transactions that take place between an organization and its stakeholders.
 
Traditionally, business was done through brick-and-mortar methods through offline stores. But 38
years ago, the internet was formed. businesses have now been using the internet to leverage
several business opportunities for over 20 years. Deploying these disruptive digital technologies has
offered innovative businesses to transform their services
 
One of these disruptive digital technologies is a recommender system
These are algorithms aimed at suggesting relevant items to users (items being movies to watch, text
to read, products to buy or anything else depending on industries).
 
 
Michael Porter developed the five forces model which helps businesses understand their strategic
position in the market.
 
These five forces are:
1. Bargaining power of suppliers
2. Threat of new entrants
3. Threat of substitutes
4. Bargaining power of buyers
5. Industry rivalry
 
Given the nature of E-business and E-commerce, the internet has had an impact on all these five
forces
 
Bargaining power of suppliers
The internet has provided opportunities to able to contact suppliers from various areas with varying
contracts and prices
 
Threat of new entrants
The internet has also severely reduced the barriers to entry and thus made it easier for new
businesses to enter the market
 
Threat of substitutes
Given the power of search engines and various other digital tools, the consumer now has the ability
to compare our product with several other substitutes

 
Bargaining power of buyers
Before the internet, the buyers usually had less authority over prices but now in this digital age,
consumers are in more control over prices and they have more bargaining power over sellers
 
Industry Rivalry
This factor is the summation of all the factors mentioned above and thus we can the internet has
definitely increased rivalry at every stage of porter's model
 
So where does the recommender system come into place with porter's model?
 
Since the recommender system is a digital tool, it can be used to leverage all the factors associated
with porter's model
 
In the case of Bargaining power of suppliers, A recommender system can use the appropriate
algorithms to help us determine the most efficient and effective suppliers
 
In the case of Threat of Substitutes, we can use our recommender system along with Search Engine
optimization to recommend why our product is the best alternative to our customers and thus
reduce the case of Threat of Substitute
 
Even in the case of Bargaining power of buyers, the recommender system can be used to show our
customers why our product is perfectly suited for their needs and as such make it less likely for them
to bargain

In the case of threat of new entrants, that is one area where the recommender system will not have
much power but if we are able to develop our recommender system with the right skills and
expertise, competitors/new entrants will be less likely to be able to copy our idea and form their
own ventures.
 
So, to conclude, yes, the recommender system is a great digital tool that can help us leverage our
strategic position in the market

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