Studying Kian Isatis Pars Competitive Position Based on Michael Porter's Five Competitive Forces Using Fuzzy Analytic Hierarchy Process (AHP)

Transcription

1 Studying Kian Isatis Pars Competitive Position Based on Michael Porter's Five Competitive Forces Using Fuzzy Analytic Hierarchy Process (AHP) Mohsen Mohammadrezaei Department of Management, Yazd Branch, Islamic Azad University, Yazd, Iran Shahnaz Nayebzadeh * Department of Management, Yazd Branch, Islamic Azad University, Yazd, Iran * Corresponding Author: Snayebzadeh@iauyazd.ac.ir Abolfazl Davoudi Roknabadi Department of Textile Engineering, Yazd Branch, Islamic Azad University, Yazd, Iran Abstract The aim of this study is to investigate the competitive position of Kian Isatis Pars Company using fuzzy analytic hierarchy process. All personnel of Kian Isatis Pars are 90 people who make up the population of the study. Selective sampling is done and high and middle managers, 10 samples, have been taken into account. Data are gathered by two questionnaires and data collection practice was field. Descriptive method of applied research is used. Two questionnaires, Fuzzy Delphi to identify indicators of Porter's five Competitive Forces, and fuzzy hierarchical analysis questionnaire for weighting the identified factors in the previous step, are distributed and collected. In this study to identify the indicators of Porter's five Forces by the use of Fuzzy Delphi technique and to investigate the mean of experts comments and achieve consensus in fuzzy hierarchical analysis of modeling and network, formation of pair wise comparison matrix, calculation of coefficients (weights) of pair wise comparison matrices, and finally calculation of indicator weight is used. The results showed that competitive forces of "competition among competitive companies" with a score of and "supplier bargaining power" with a score of are respectively the highest and lowest score in terms of the importance for the company's managers and experts. In other words, the most important competitive force that Kian Isatis Pars Company faced to is the competitiveness of competitive companies and bargaining power of suppliers is in the last degree of importance. Keywords: Seeking Competition, Competitive Strategy, Porter s Competitive Factors, Fuzzy Delphi, Analytic Hierarchy Process. Page 75

2 1. Introduction Today the competition between companies is not the only reason of competitors existence, but also competition in a particular industry is rooted in its economic principles and competitive forces in the market that placed at a different level than competitors. Customers, suppliers of raw materials, new potential arrivals and alternative goods are all competitors that may be more or less prominent and active depending on the type of industrial fields (Rahimnia and Alawi, 2008, 7); As already competitive strategy and its key branches of industry analysis, competitors analysis and strategic positioning are considered as an accepted part of the management activities (Porter, 2012). According to the importance of competitiveness, today it is considered as an essential mean to achieve the desired economic growth and sustainable development. As competitiveness is a quality that is achieved through the rule of the market and the formation of activities based on comparative and competitive advantages and as the competitiveness power is greater, more benefits are belonged to the firm, region, country and whole economy (Karimi and Iravani, 2007, 110). Company success depends on having a responsive and innovative marketing strategy that matches a company's strengths and weaknesses (Cook., 1983, 68). As Walsh et al., (2005) have claimed there is a relation between seeking competition and long-term success of a company, and as a result it highlights the importance of seeking competition. However, seeking competition is also relevant to some factors that lead to company's competitiveness and is associated with the manner of its achievement (Walsh et al., 2005). Intense competition is the result of interaction between a number of structural factors, numerous and balanced competitors, slow growth of the industry, high fixed costs or storage costs, lack of differentiation or switching costs, increasing capacity in the broad development and diverse competitors (Botten and McManus., 1999). Competition occurs when the competitors feel pressure or have opportunity to improve their position in products or services. Competition between companies can be reduced by creating distinctive products or services (Enz., 2010). Intense competition in international markets requires organizations that improve seeking competition. These improvements benefit not only the companies, but also as a whole it has a direct impact on the seeking competition of industry. In fact, the seeking competition of organizations within a specific industry reflects the seeking competition of that industry (Sirikrai and Tang., 2006). Seeking competition is at the center and core of businesses in the market economy. It represents the ability and performance of an organization, a subdivision, and a country to sell and supply goods or its services in a given market (Chen and Wang., 2009). It is better that the mission of growth strategy be transferred to the businesses that have a moderate competitive power and act in attractive markets (Menon et al., 1999) and for the businesses that have poor competitive position and are placed in attractive markets, strategic mission is removed or development is assigned to this category of businesses (Mckee, 1989). Login threat to an industry depends on the present barriers to entry and the reaction of present competitors in it that newcomers can expect it. If barriers to entry in an industry are high, the threat posed by competitive forces reduces (Porter, 2006). Page 76

3 Companies can use industry competition forces to implement new strategies or to decide to leave the industry (Enz., 2010). For decades seeking competition of an organization/company has been the focus of various approaches to strategic management and covers numerous questions. For example, why companies are different, how they act, what is their strategy and how are they managed (Porter., 1991). The aim of Porter Five Forces Model is to achieve a full understanding of a particular industry with the analysis of external environment through the analysis of identified five competitive forces (Porter, 1985). Porter's model has a particular importance and position. Investigating the scholars and researchers views indicates that there is not a same definition and interpretation of competitiveness, but in general competitiveness can be attributed as a capability that a business, industry, region or country has and can maintain them and their human resources are protected in a relatively high position. In other words, competitiveness means the ability to increase market share, profitability, growth of the added value and staying on the scene of fair competition for a long period (Khodamoradi et al., 2011, 103). So this study seeks an answer to this question that how is the competitive position of Kian Isatis Pars Company in terms of Michael Porter's five Competitive Forces? 2. Literature Review 2.1. Competition Competition is the result of constant and continuous effort of companies to achieve more common interests in markets. This competition occurs for survival, sending out competitors from the field and earning more benefits to achieve organizational goals (Rahimnia and Alawi, 2008, 7) Competitiveness Competitiveness occurs through a combination of assets and processes. Assets are either blessing (e.g. natural resources) or created by humans (e.g. infrastructures and processes that make asset to the economic benefits from sales to customers and finally competitiveness is caused.) (Khodamoradi et al., 2011, ). Organization for Economic Co-operation and Development (1996) believes that competitiveness is: "A level of the country's production of goods and services that can in free market positions absorb the demands of global markets and meet different levels of this demand and at the same time and in this way increases the real incomes of citizens in long-time." Mentioned organization in another definition states: "Competitiveness is a degree of the opening market that a country can produce goods and services while feels foreign competitors at its side and at the same time can increase the real income of its own." (Johnny, 2011, 150). Increase of competitive ability or competitiveness of organizations in society creates a competitive environment and finally leads to the improvement of national competitiveness (Khodamoradi et al., 2011, 104) Seeking Competition Seeking competition is an attractive concept in various levels of study that covers the organization level, micro-economic level for the policy and industrial policy, and macro- Page 77

4 economic level for the competitive position of national economies (Nelson., 1992). The concept of seeking competition is discussed by academic researchers in different scientific fields. Significant studies on the concept of competition, competitiveness and seeking competition, and the manner of its measuring at the levels of aggregation transitive like the company, industry and/or a part of that and the nation level has been done (Mc Fetridge., 1995). Seeking competition represents quantitative and qualitative superiority and supremacy of one unit (a company, a region, etc.) on the status of its real and potential competitors (Cracolici and Nijkamp., 2008). Invancevich et al., (1997) defined seeking competition as: the degree to which a company can, under free and fair market conditions, produce goods and services that pass the tests of international markets and at the same time maintains or increases the real income of its own employees and owners (Invancevich et al., 1997). Seeking competition as a multidimensional concept requires the emission of capabilities, efficient use of production factors and natural resources, and increase of productivity which, as a result, guarantees higher living standards (Onut et al., 2009). Ramasamy (1995) defines seeking competition as the ability to increase market share, profit and growth in added value and competitive standing for a long period Porter's Competitive Forces Professor Michael Porter is one of the professors of economics at Harvard University and also one of the world's most prominent economic theorists who has researched in the field of competitive strategy, international competition, the relationship between competition and society and the relationship between competition and business environment. One of the most important theories of him is known as Porter's five Forces that identifies the amount of long-term attractiveness of the industry and the opportunities and threats in the competitive environment of a company and is used as an important tool to analyze the structure of the industry in the strategy formulation process. Porter believes that the intensity of competition in an industry can not be attributed to coincidence or bad luck, but competition in an industry is rooted in the basic structure of its economy and is beyond the performance of existing competitors (Porter, 2006). Today competition in an industry that is the outcome of all five competitive forces determines the structure of the industry and shapes the nature of competitive interaction within an industry. These mutual competitive forces that form the structure of industry and determine the attractiveness and profitability in the medium and long term of an industry consist of: (Porter, 2008) 1) Competition between existing competitors 2) Threats of potential competitors (newcomers) 3) Bargaining power of suppliers (providers) 4) Bargaining power of buyers 5) Threat of alternative products. Combination of these forces is various in different industries and the strongest competitive force or forces, determine the profitability of the industry and become the most important element in setting strategy, but always the strongest and the most evident force is not seen (Hamidizadeh et al., 2012, 42). Page 78

5 1. Competition among Existing Companies in Industry: This force is also cited as emulation among competitive companies. Among other forces, this force is the greatest strength (David, 1997). The most important factors that increase competition between companies in an industry are: industrial slow growth, high fixed costs, lack of product diversity, high number of competitors and high barriers to exit (A'arabi., 2008). 2. Login Threat of New Competitors: New competitors in an industry bring new capacities, tendency to take market share and new resources (Enz., 2010). More easily new competitors can enter the industry, more easily they can reduce prices and profits (Porter, 2012). Forces that prevent new competitors from entering and maintain the current competitors are called barriers to entry and some of them are appropriate thrift, high level of equipment investment, high levels of product variety, high-output costs, lack of access to distribution channels, government regulations and the lack of preparation (A'arabi., 2008). New competitors into an industry bring new capacities, tendency to take market share and new resources (Khodamoradi et al., 2011, 106). 3. Login Threat of Alternative Products and Services: This type of threat is also called as indirect competitors (A'arabi., 2008). In many industries, companies are strongly in competition with manufacturers of alternative products (belonging to other industries). If the price of alternative products and the costs associated with the preparation of these products reduce, competition will be intensified and competitive pressures are increasing wherever there are alternative products (David, 1997). So we can say that close alternatives can determine the price (A'arabi., 2008). 4. Bargaining Power of Suppliers: Much more power suppliers have, they can affect industry profitability and put it under pressure so that the industry can not offset cost through price increases. The power of each important supplier relies on the number of features of the related market position and the relative importance of their trading in industry in comparison to their total activity (Pearce and Robinson., 2007). It is possible to increase the bargaining power of suppliers in an industry environment by the use of factors like limited number of supplier, limited similarity of goods and services, independent suppliers to sales increase, supplier s confidence about manufacturer s need to them and the manner of supplier s superior performance (A'arabi., 2008). 5. Bargaining Power of Buyers: Buyers effort to reduce prices to compete with the industry and they always try to get a product that has a higher and better quality or even receive more services. They may also stimulate competitive companies against each other. Many companies neutralize buyers power through the creation of loyalty programs and presentation of products/distinct services (Crook et al., 2003). One of the environmental forces in industry is bargaining power of buyers (Porter, 2012) Porter's Model of Competitive Forces and Competitive Strategies Porter's Competitive Forces Model is one of the known frameworks for analyzing seeking competition (Khorshid and Samad., 2013, 66) and is used to develop companies competitive strategies to enhance their competitive margins. In this model five competitive forces are proposed which are the login threat of new competitors, bargaining power of suppliers, bargaining power of customers (buyers), the threat of alternative products or services, and Page 79

6 Threats of New Competitors Login Threat of Alternative Goods Special Issue competition among existing companies in industry. These can endanger competitive position of a company in a particular industry (figure 1). New Competitors Industry Competitors Suppliers Bargaining Power of Suppliers Intensity of Competition between Existing Competitors Bargaining Power of Customers Customers Alternatives Figure 1. Porter's Five Competitive Forces (Khorshid and Samad., 2013, 66). 3. Methodology Kind of Methodology Expected outcomes of the study can be used in the process of upgrading high and middle managers insight in Isatis Kian Pars Company to analyze competitive position. So this study is an "applied research". Due to the collection of data at a time, this study is also a cross-sectional research. Furthermore, because of the possibility to control variables, it is a non-experimental study and in the group of non-experimental research, it is a descriptive study. On the other hand, since this study examines the competitive position of Kian Pars Isatis Company according to the Michael Porter's five Competitive Forces, it can be considered as a case study. Samples Kian Isatis Pars Company employees are 90 people who make up the study population. Because high and middle managers in this company are familiar with the questionnaire issues, 10 people of them are taken into account as samples. Page 80

7 Data Collection This study is a field survey and to collect data in order to achieve the objectives of the study two questionnaires are distributed and analyzed: Fuzzy Delphi questionnaire to identify indicators of Porter's five Competitive Forces and fuzzy hierarchical analysis questionnaire for weighting the identified factors in the previous step. One of the most important aspects of any research is the appropriateness of the instruments of measurement because required information and data for analysis and final conclusion are obtained by measuring instruments. As it was mentioned used instrument in this study is questionnaire. The validity of this questionnaire which according to the model is used in paired comparison of components and indicators is largely dependent on the validity of fuzzy hierarchical analysis. Moreover, in order to gain more confidence in the validity of the criteria and questionnaire, supervisor and advisors opinions and recommendations were used. Furthermore, to make sure that the framework of questionnaire is clear, proposals of company managers were used to have final changes. Data Analysis In this study multi-criteria decision making techniques in fuzzy environment are used to achieve the objectives. Indicators of Porter's Five Forces are identified by the use of Fuzzy Delphi techniques, investigating experts opinions and achieving consensus. Network construction and modeling, formation of pair wise comparison matrix, calculation of coefficients (weights) of pair wise comparison matrices and finally calculation of weight index are used in fuzzy hierarchical analysis. Fuzzy Delphi technique was used to identify competitive factors. For this purpose, a questionnaire was designed for Delphi experts. Then the mean of experts opinions was calculated and then second questionnaire according to the mean of the opinions of experts in the first questionnaire and the answer of each expert to the first questionnaire was adjusted. Experts disagreement with mean was adjusted in a questionnaire and again they were asked to express their opinions. Results were obtained of the second questionnaire. In the next step, the mean of experts opinions in the second questionnaire was calculated and then mean differences in two questionnaires has been obtained. Table 1. The mean differences of experts opinions in the first and second stages - Bargaining Power of Buyer Mean Differences 1 Importance of customer Fame of customer Possibility of backward integration for customer Importance of company brand reputation for customer Number of customers Switching costs of Kian Isatis Company to its competitors Amount of customer s purchases Importance of customers for company Growth stages of customers demand Page 81

8 10 Customers access to information Specific product offerings by the Company Cooperation between company and customer to achieve win-win situation Bargaining Power of Suppliers Mean Differences 1 Number of suppliers Amount of entry supplies by suppliers Existence of alternative entries Effect of entries on cost of production incurred by the company Effect of entries on the cost of company distinction Cost of changing supplier for company Better input source of a supplier in comparison to other suppliers Cooperation between company and supplier to achieve win-win situation Entries differences Government policy Reducing the supply of materials and components by supplier An input source from a particular supplier will be an important part of the production process of Kian Company Existence of a limited number of suppliers for a particular entry Possibility of forward integration for suppliers Existence of suitable alternative products for some entry sources 0 - Competition from Alternative Products Mean Differences 1 Ease of products replacement Emergence of new alternative products Pricing of alternative products Quality performance of alternative products Low-cost replacement of Kian Isatis Company products to those of other competitors Existence of high price of alternative products Profitability of manufacturers of alternative products Ability of manufacturers of alternative products Login Threat of New Competitors Mean Differences 1 Learning curve (experience) Amount of distinction Government policies Existence of corporate and capable candidates to entry Ease of crossing the barriers to entry Current members of industry efforts to enter new geographical areas Expected profit for new companies Growth stages of buyers demand Current members of the industry cope with the arrival of new companies Profitability of current members of industry Industry outlook Competition among Competitive Sellers Mean Differences 1 Company and its competitors efforts to improve their position in the market Growth stages of buyers demand Existence of excess capacity for the company and its competitors Page 82

9 4 Number of competitors Competitiveness of the company and its competitors Poor differences of competitive sellers goods Low cost of buyer to go toward other brands Weak competitors bought by companies who are out of industry Buyer s loyalty to a particular company Cost of buyer to go toward competitor brands Limited number of competitors Because the mean differences of all criteria are less than 0.15, a good consensus has been achieved. Therefore criteria which have insignificant answers are deleted. Selected final indicators of Porter's Five Forces are presented in Table 2. Table 2. Selected indicators of Porter's Five Forces in Kian Isatis Pars Company Bargaining Power of Buyer Number of customers Amount of customer purchases Customer access to information Growth stages of customers demand Importance of customer for company Switching costs of Kian Isatis Company to its competitors Specific product offerings by the company Cooperation between company and customer to achieve win-win situation Bargaining Power of Suppliers Number of suppliers Amount of entry supplies by suppliers Existence of alternative entries Effect of entries on cost of company s production Effect of entries on the cost of company distinction Cost of changing supplier for company Better input source of a supplier in comparison to other suppliers Cooperation between company and supplier to achieve win-win situation Competition from Alternative Products Ease of replacement Pricing of alternative products Quality performance of alternative products Profitability of manufacturers of alternative products Ability of manufacturers of alternative products Login Threat of New Competitors Learning curve (experience) Government policies Industry outlook Growth stages of buyers demand Existence of corporate and capable candidates to entry Current members of the industry effort with the arrival of new companies Current members of the industry cope with the arrival of new companies Profitability of current members of industry Competition among Competitive Sellers Number of competitors Competitiveness of the company and its competitors Existence of excess capacity for the company and its competitors Company and its competitors efforts to improve their position in the market Growth stages of buyers demand Buyer s loyalty to a particular company Page 83

10 For competitive position of company fuzzy hierarchical analysis technique is used. To this end, a questionnaire is designed for experts. Although use of paired comparisons is easy and simple, it cannot consider the uncertainty and ambiguity that lies in human judgments because human evaluation is subjective and inaccurate. According to the mentioned points and since the analysis of the research problem is associated with ambiguity in judgment, it was preferred that questionnaires design for a range and data be collected by the use of fuzzy spectrum. In the next step to use fuzzy approach, experts opinions were received in theological terms as it is mentioned in Table 3. In fact, the respondents based on their experience and knowledge had paired comparison and based on the superiority of each component or indicator in comparison to the opposite one, the following words and expressions have been used. Table 3. Fuzzy numbers corresponding to verbal statements and options Linguistic Variables of Interval Values Positive Reverse Interval Extremely Questionnaire important [9,9 ] [1.9,1.9] Values Very important to extremely important [7,9 ] [1.9,1.7] Very important [6,8] [1.8,1.6] Important to very important [5,7 ] [1.7,1.5] Important [4,6 ] [1.6,1.4] Fairly important to important [3,5 ] [1.5,1.3] Fairly important [2,4 ] [1.4,1.2] Equal importance to fairly important [1,3] [1.3,1] Equal importance [1,1] [1,1] Finally, Porter s Competitive Factors and indicators were analyzed by the use of fuzzy hierarchical analysis. In this process because the issue is specialized, the experts opinions in the company were used. 4. Study Findings In this study using fuzzy analytic hierarchy process, final weight of criteria were calculated by taking into account the interaction criteria of Porter's five Competitive Forces. First Step: Experts Opinions Collection After gathering questionnaires to facilitate the formation of pairwise comparison matrix of experts opinions, for each of the answers was assigned fuzzy numbers corresponded with options and then to collect experts opinions, geometric mean of respondents pairwise comparisons are calculated using equation 1. The reason for use of definite numbers at this stage is the ease of calculation. Moreover, using sample test of geometric mean of fuzzy numbers it was confirmed that results are close together. Geometric mean of n experts opinion = : Equation 1 Page 84

11 Second Step: Calculating the Weight of Each Competitive Force Table 4: Geometric mean of competitive forces Bargaining Bargaining Competition among Threat of Intensity of Login Threat of Power of Power of Competitive Alternative Competition New Competitors Buyer Suppliers Companies Products Bargaining Power of Buyer Bargaining Power of Suppliers Competition among Competitive Companies Login Threat of New Competitors Threat of Alternative Products Step 1: Conversion of geometric means into fuzzy numbers In this step (According to the triangular fuzzy numbers which were allocated to options in last part) by the use of relationships, we have converted geometric means into fuzzy numbers. Fuzzified X = (x-5, x, x+.5) : Equation 2 (According to the previous steps) Step 2: Sk calculation of each row To calculate Sk for each row, the sum of numbers in that row is multiplied in reverse of sum of numbers of paired comparisons matrix. Sk calculations are presented in Table 5. Step 3: The magnitude degree (v) of each Sk is determined using the following equation. Equation 3: 1 2 V(Si S j) otherwise (u1 L 2) (m2 m 1) Mi mj 1 u L As you see in above equation if mi mj, it is not needed to calculate Sk and it is 1. Table 5. Weighting matrix to indicators Sum of Each Row Reverse Sk Page 85

12 Bargaining power of buyer Competitive Forces Local Weights Local Weights Final Weights Special Issue Step 4: Using the following equation the magnitude degree of each Sk in comparison to any other Sk was measured and obtained numbers from this phase are non-normal weights of each indicator. W (xi) = min {V (Si Sk)} k=1, 2, n, k i : Equation 4 Step 5: If non-normal weights are divided by the sum of non-normal weights, normal weights of indicators are obtained. W (xi) = W (xi) / W (xi) : Equation 5 Competitive Force Table 6: Final weights of competitive forces Non-normal Title Weight Normal Weight 1 Bargaining power of buyer Bargaining power of suppliers Competition among competitive companies Login threat of new competitors Threat of alternative products Total Third Step: Calculating the Weight of Indicators for Each One of Competitive Forces In this step the indicators weight of each competitive force is calculated as the previous steps and their results are presented in final table. Forth Step: Calculating the Final Weight of Indicators Now that weight of Porter's Competitive Forces (components) and indicators are obtained, final weight of indicators will be specified by multiplying the weight of components in indicators weight. Table 7. Calculating the final weight of indicators in Porter's Competitive Forces Indicators of Porter's Competitive Forces Number of customers Amount of customer purchases Customer s access to information Growth stages of customers demand Importance of customer for the company Switching costs of Kian Isatis Company to its competitors Specific product offerings by the company Cooperation between company and customer to achieve win-win situation Page 86

13 Threat of alternative products Login threat of new competitors among competitive Bargaining power of supplier Special Issue Number of suppliers Amount of entry supplies by suppliers Existence of alternative entries Effect of entries on cost of company s production Effect of entries on the cost of company distinction Cost of changing supplier for company Better input source of a supplier in comparison to other suppliers Cooperation between company and supplier to achieve win-win situation Number of competitors Competitiveness of the company and its competitors Existence of excess capacity for the company and its competitors Company and its competitors efforts to improve their position in the market Growth stages of buyers demand Buyer s loyalty to a particular company Learning curve (experience) Government policies Industry outlook Growth stages of buyers demand Existence of corporate and capable candidates to entry Expected profits for new companies Current members of the industry effort to enter new geographical areas Current members of the industry cope with the arrival of new companies The profitability of current members of industry Ease of products replacement Pricing of alternative products Quality performance of alternative products Profitability of manufacturers of alternative products Ability of manufacturers of alternative products Discussion and Conclusion In this section the results obtained from the analysis of data related to Porter's Competitive Forces and Kian Isatis Pars competitive position are explained as follow: A: Results of Weighting to Porter s Competitive Forces Among Porter s Competitive Forces, competitive forces of "Competition among competitive companies" with a score of and "Bargaining power of supplier" with a score of are respectively the highest and lowest score in terms of the importance for the company's managers and experts. This result suggests that the most important competitive force that Kian Isatis Pars Company faces to is the competitiveness of competitive companies and the bargaining power of suppliers is in the last degree of importance. B: Results of Weighting to Indicators of Porter's Competitive Forces 1) Among the indicators of competitive force of "Bargaining power of buyer", "Importance of customer for the company" indicator with a score of 0.07 has the most importance and "Switching costs of company in comparison to its competitors" indicator with a score of has the least importance. 2) Among the indicators of competitive force of "Bargaining power of supplier", "Cooperation between company and supplier to achieve win-win situation" with a score Page 87

14 of is the most important indicator and "Number of suppliers" and "Amount of entry supplies by supplier" with a score of are the least important indicators. 3) Among the competitive force indicators of "Competition among competitive companies", "Competitiveness of the company and its competitors" indicator with a score of 0.09 has the most importance and "Number of competitors" indicator with a score of has the least importance. 4) Among the indicators of competitive force of "Login threat of new competitors", "Industry outlook" with a score of is the most important indicator and "Learning curve" and "Expected profits for new companies" with a score of are the least important indicators. 5) Among the indicators of competitive force of "Threat of alternative products", "Ability of manufacturers of alternative products" indicator with a score of has the most importance and "Pricing of alternative products" with a score of has the least importance. Practical Suggestions The outcome of this research is firstly to identify indicators that can be ascribed as indicators of the competitive five forces in Kian Isatis Pars Company. Therefore, it is suggested that managers of this company and similar companies in industry pay attention to the list of indicators that in this study, according to company managers opinion as experts, have been drawn to have factbased knowledge in today's competitive environment in order to assess their competitive position. Important point is that because of political changes, today s competitive conditions in country are changing and indicators that experts presented as the main indicators of five forces in this study may change too. Therefore, it is recommended that managers of Kian Isatis Pars Company use periodic and systematic assessment of the five forces competitive indicators in their work schedule. The data analysis reveal that among Michael Porter's five Forces of Competition, "Competition among competitive companies" is the most important force for managers of Kian Isatis Pars Company and then "Bargaining power of buyers", "Threat of alternative products", "Login threat of new competitors" and at the end "Bargaining power of suppliers" are respectively in the next level of importance and on the same basis the intensity of competition, respectively, are affected by these forces. Therefore it is recommended to gain competitive advantage pay attention to these forces due to the degree of importance they have. Collective power of these five forces determines profitability in an industry. When a company puts itself in a better position than its competitors, it earns a profit higher than the industry average but the importance of these forces are not identical and therefore will require different attention. It is recommended that according to the degree of importance of these forces company's managers as well as managers of competitive companies in this industry continually seek to identify indicators of each force which are changing constantly and in this way maintain and strengthen their competitive position. Page 88

15 Suggestions for Future Research This study is done in one of the subsidiary companies of Desert Industrial Group in Yazd. Kian Isatis Pars Company is established in line with industrial policies of Desert Industrial Group in order to take an effective step towards the creation of electrical village in this group through the development of the electricity industry in the areas of administrative activity and in these years, with all power, moved towards progress. Therefore it is recommended that researchers examine the seeking competition force of Kian Isatis Pars Company according to its performance during the four years of existence and activities on the basis of comprehensive Balanced Scorecard approach. Moreover, it is suggested that interested researchers do research on external environment and indicators such as the technological developments and also cultural environment and indicators such as the environmental responsibility of companies along with the analysis of competitive position of company. Page 89

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