123425 - Five Forces Analysis

123425 - Five Forces Analysis

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Intensity of Existing Rivalry

Government limits competition (123425) Government policies and regulations can dictate the level of competition within the industry. When...
Large industry size (123425) Large industries allow multiple firms and produces to prosper without having to steal market share...
Fast industry growth rate (123425) When industries are growing revenue quickly, they are less likely to compete, because the total...
Relatively few competitors (123425) Few competitors mean fewer firms are competing for the same customers and resources, which is a...

Bargaining Power of Suppliers

Large number of substitute inputs (123425) When there are a large number of substitute inputs, suppliers have less bargaining leverage over...
High competition among suppliers (123425) High levels of competition among suppliers acts to reduce prices to producers. This is a positive...
Volume is critical to suppliers (123425) When suppliers are reliant on high volumes, they have less bargaining power, because a producer can...
Low cost of switching suppliers (123425) The easier it is to switch suppliers, the less bargaining power they have. Low supplier switching...

Threat of Substitutes

Substitute is lower quality (123425) A lower quality product means a customer is less likely to switch from 123425 to another product or...
Substantial product differentiation (123425) When products and services are very different, customers are less likely to find comparable product...

Bargaining Power of Customers

Product is important to customer (123425) When customers cherish particular products they end up paying more for that one product. This...
Large number of customers (123425) When there are large numbers of customers, no one customer tends to have bargaining leverage....

Threat of New Competitors

High capital requirements (123425) High capital requirements mean a company must spend a lot of money in order to compete in the...
Industry requires economies of scale (123425) Economies of scale help producers to lower their cost by producing the next unit of output at lower...
Strong brand names are important (123425) If strong brands are critical to compete, then new competitors will have to improve their brand...
Patents limit new competition (123425) Patents that cover vital technologies make it difficult for new competitors, because the best...
Customers are loyal to existing brands (123425) It takes time and money to build a brand. When companies need to spend resources building a brand,...
Entry barriers are high (123425) When barriers are high, it is more difficult for new competitors to enter the market. High entry...

What is Porter's Five Forces Analysis?

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