Five Forces of Competition Model
From the e-Activity, analyze the industry you selected using the Five Forces of Competition Model to determine the impact of each of the five forces.
Based on your analysis, determine if the industry is attractive or unattractive. Explain your rationale.
The freight and railroad industry that Union Pacific is in is very attractive. The first force of the threat of new potential entrants will not be high in this industry because of the current economic environment. With companies looking to decrease the risk of new companies coming in is very low. The second force of substitute products will be very minimal as freight is an industry that is difficult to substitute. As Union Pacific expands there will be many vendors that will be looking to work with Union Pacific so this will be very applicable to the fourth force of bargaining power of suppliers. The fifth force of bargaining power of buyers and competition will play into Union Pacific’s expansion as well.
Union Pacific is in very good position to continue to be a profitable company in a good industry. It is a smart time for Union Pacific to expand as the economic downturn and the troubles of the economy has made so many businesses very tentative. This tentativeness has created a good opportunity for other companies to expand and Union Pacific is taking full advantage of this opportunity.
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