The crystal diagram example "Vicious circle" was created using the ConceptDraw PRO diagramming and vector drawing software extended with the Target and Circular Diagrams solution from the Marketing area of ConceptDraw Solution Park. Its solution could be to print still more money starting another iteration of the vicious cycle." Because of this, the level of savings in the country is very low and the government could have problems refinancing its debt. Eventually, the currency loses all of its value. They convert their financial assets into physical assets while their money still has some purchasing power. In an inflationary environment, people tend to spend their money quickly because they expect its value to decrease further in the future. This increase in the money supply could increase the level of inflation. Whatever the cause, the government could pay down some of its debt by printing more money (called monetizing the debt). The initial exogenous event might be a sudden large increase in international interest rates or a massive increase in government debt due to excessive spendings. Hyperinflation is a spiral of inflation which causes even higher inflation. The best-known example of a vicious circle is hyperinflation. The prefix "hyper-" is sometimes used to describe these cycles if they are extreme. These cycles will continue in the direction of their momentum until an external factor intervenes and breaks the cycle. Both systems of events have feedback loops in which each iteration of the cycle reinforces the previous one (positive feedback). A virtuous circle has favorable results, while a vicious circle has detrimental results.īoth circles are complexes of events with no tendency towards equilibrium (at least in the short run). They refer to a complex chain of events that reinforces itself through a feedback loop. "A virtuous circle and a vicious circle (also referred to as virtuous cycle and vicious cycle) are economic terms. "An example of the use of a vicious circle in macroeconomics." This hexagon diagram sample was redesigned from the Wikipedia file: Vicious circle in macroeconomics.svg. The hub-and-spoke diagram example "Porter five forces model" was created using the ConceptDraw PRO diagramming and vector drawing software extended with the Circle-Spoke Diagrams solution from the area "What is a Diagram" of ConceptDraw Solution Park. Porter's five forces include – three forces from 'horizontal' competition: the threat of substitute products or services, the threat of established rivals, and the threat of new entrants and two forces from 'vertical' competition: the bargaining power of suppliers and the bargaining power of customers." This analysis is associated with its principal innovator Michael E. A very unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven to normal profit.
An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. Attractiveness in this context refers to the overall industry profitability.
It draws upon industrial organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of an Industry. "Porter's five forces analysis is a framework that attempts to analyze the level of competition within an industry and business strategy development. It was designed on the base of the Wikimedia Commons file: Modelo Porter.png. This circle-spoke diagram sample shows the Porter five forces model.