The Detailed Four Forces Framework (FFF)
Global market Intense foreign competition
forces Foreign demand growth
Market presence as
Decreased importance competitive threat
of direct labour cost
Changing competitive priorities
New cost priorities
Increased capital
intensity of production
facilities
Global cost Globalisation Technological
forces process forces
Advances in
manufacturing/Transporta-
tion/ communication
Exchange rate Technical knowledge
diffusion
Trade restrictions
Interfirm technology
Trade agreements sharing
& liberalisation Political and Global R&D location
economic forces
ITC M10:U5:5.1-1
, Global Market Forces refer to both foreign
competitors and customers:
Firms react to foreign competitor‘s market entry
by approaching the competitor‘s home market
Foreign markets often offer the highest demand
for a product, which is particularly valuable when
the local market is saturated
Demand for foreign products has been heightened
by freer information flows and wider exposure
though the Internet
ITC M10:U5:5.1-2
, Technological Forces refer to changes in the
sources of product components or their
development:
Newly industrialised countries start to
play major roles in providing new
technologies
Opportunities for interfirm collaboration
ITC M10:U5:5.1-3
, Global Cost forces refer to:
Cost of labour influences the choice of location for
production facilities
Increased interest in not only unskilled labour but
also low-cost skilled labour – for example India
Labour costs savings are often overridden by
increases in other costs (additional training,
bureaucratic government structures)
ITC M10:U5:5.1-4
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