200 - Five Forces Analysis

200 - Five Forces Analysis

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Short description of Porter's Five Forces analysis for…

Intensity of Existing Rivalry

Relatively few competitors (200) Few competitors mean fewer firms are competing for the same customers and resources, which is a...
Exit barriers are low (200) When exit barriers are low, weak firms are more likely to leave the market, which will increase the...

Bargaining Power of Suppliers

Large number of substitute inputs (200) When there are a large number of substitute inputs, suppliers have less bargaining leverage over...
High competition among suppliers (200) High levels of competition among suppliers acts to reduce prices to producers. This is a positive...
Low cost of switching suppliers (200) The easier it is to switch suppliers, the less bargaining power they have. Low supplier switching...
Inputs have little impact on costs (200) When inputs are not a big component of costs, suppliers of those inputs have less bargaining power....
Critical production inputs are similar (200) When critical production inputs are similar, it is easier to mix and match inputs, which reduces...

Threat of Substitutes

Substitute has lower performance (200) A lower performance product means a customer is less likely to switch from 200 to another product or...
Substitute product is inferior (200) An inferior product means a customer is less likely to switch from 200 to another product or...
Substantial product differentiation (200) When products and services are very different, customers are less likely to find comparable product...
Limited number of substitutes (200) A limited number of substitutes mean that customers cannot easily find other products or services...

Bargaining Power of Customers

Buyers require special customization (200) When customers require special customizations, they are less likely to switch to producers who have...
Limited buyer information availability (200) When buyers have limited information, they are at a disadvantage in negotiations with sellers....
Product is important to customer (200) When customers cherish particular products they end up paying more for that one product. This...
Limited buyer choice (200) When customers have limited choices they end up paying more for the choices that are available....

Threat of New Competitors

High capital requirements (200) High capital requirements mean a company must spend a lot of money in order to compete in the...
High sunk costs limit competition (200) High sunk costs make it difficult for a competitor to enter a new market, because they have to...
Industry requires economies of scale (200) Economies of scale help producers to lower their cost by producing the next unit of output at lower...
Customers are loyal to existing brands (200) It takes time and money to build a brand. When companies need to spend resources building a brand,...
High learning curve (200) When the learning curve is high, new competitors must spend time and money studying the market...
Entry barriers are high (200) 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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