According to the Five Competitive Forces That Shape Strategy video by Harvard Business Review, the five forces explain to us that you are competing with direct competitors, but at the same time you want to be able to gain profit for the business. These profits will be eligible to extend customers who have negotiating power suppliers and those who might come in and grab a piece of the action to substitute products and services.
The five forces is a way of looking at any industry and understanding structural underlining drivers of profitability and competition. Every industry is different and will have a set of economic fundamentals. The force is there to help you find out what is exactly causing profitability in your industry and what are the trends that are most likely to be significant and changing them to get into the business.
A supply chain activity is a trust and social characteristic which is important for forecasting information and sharing during the business hours. Furthermore, salesperson’s that were interviewed indicated the key to success by trusting and mutually utilizing relationships with the dealers. In this article, the role that trusts the length of the relationship and social characteristics of the salesperson the retailer has the forecasted information by sharing the machinery.
The competition between the salesperson and the retailer is to develop trust and construct a multiple period model. Once the forecast is complete the salesperson will recommend his forecast of demand which will let the retailer select his order of quantity and place of the order that was made. The behavior of the supply chain management with different types of the salesperson, the examiner follows to understand how the social characteristic of the salesperson impacts supply chain performance.
Retailers are not attentive to the accuracy of the salesperson in demand forecast except through the experiences. For example, as mentioned in the article for Trust and Information Sharing in Supply Chains (2012, Ebrahim-Khanjari p.2) “The salesperson could be concerned only about her compensation, she could also be concerned about the profits to the manufacturer, or she could be concerned about the profits of the retailer as well”.
This is a perfect example of explaining how the retailers and salespeople figure out their performances through personal traits. Retailers of trust in the salesperson influences the mass that is given to the salesperson’s recommendation. After the observation demand at the end of each period, the retailer will update their trust on the salespersons how they did on their performances. As we have expected the salesperson tends to expand its forecast to manipulate the retailer orders. However, manipulative behavior has controlled a rule of trust as a self-serving salesperson has an incentive to moderate behavior towards honesty.
