2.2.1 Understanding Forces of Competition In Private Sector organisations.
The nature of the five forces within an organisation's environment changes over time. For example, a large part of the food retail sector used to be characterised by relatively large and powerful distributors serving numerous small and weak retailers. Over time the balance of power has shifted in many countries as food retailing has become concentrated in a few supermarket chains with massive purchasing power. A different type of change is illustrated by the market for telephone services. In the early days of mobile telephony, mobile telephones were a complement to, rather than a substitute for, telephone services based on landlines. As price structures have changed in the industry, mobile telephony has increasingly become a direct substitute for landline-based telephony. The five forces analysis provides a framework for analysing changes such as these. Changes in the level and kind of competition affect the structure of the industry, and the structure of the industry affects the nature of competition.