210 5 Forces - Five Forces Analysis

210 5 Forces - Five Forces Analysis

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Short description of Porter's Five Forces analysis for…

Intensity of Existing Rivalry

Large industry size (210 5 Forces) Large industries allow multiple firms and produces to prosper without having to steal market share...
Government limits competition (210 5 Forces) Government policies and regulations can dictate the level of competition within the industry. When...

Bargaining Power of Suppliers

Low cost of switching suppliers (210 5 Forces) The easier it is to switch suppliers, the less bargaining power they have. Low supplier switching...
Diverse distribution channel (210 5 Forces) The more diverse distribution channels become the less bargaining power a single distributor will...
Critical production inputs are similar (210 5 Forces) When critical production inputs are similar, it is easier to mix and match inputs, which reduces...
Large number of substitute inputs (210 5 Forces) When there are a large number of substitute inputs, suppliers have less bargaining leverage over...
High competition among suppliers (210 5 Forces) High levels of competition among suppliers acts to reduce prices to producers. This is a positive...

Threat of Substitutes

Substitute has lower performance (210 5 Forces) A lower performance product means a customer is less likely to switch from 210 5 Forces to another...
Substantial product differentiation (210 5 Forces) When products and services are very different, customers are less likely to find comparable product...
Limited number of substitutes (210 5 Forces) A limited number of substitutes mean that customers cannot easily find other products or services...

Bargaining Power of Customers

Product is important to customer (210 5 Forces) When customers cherish particular products they end up paying more for that one product. This...
Buyers require special customization (210 5 Forces) When customers require special customizations, they are less likely to switch to producers who have...
Low buyer price sensitivity (210 5 Forces) When buyers are less sensitive to prices, prices can increase and buyers will still buy the product....
Large number of customers (210 5 Forces) When there are large numbers of customers, no one customer tends to have bargaining leverage....
Limited buyer choice (210 5 Forces) When customers have limited choices they end up paying more for the choices that are available....

Threat of New Competitors

Strong distribution network required (210 5 Forces) Weak distribution networks mean goods are more expensive to move around and some goods don’t get to...
High capital requirements (210 5 Forces) High capital requirements mean a company must spend a lot of money in order to compete in the...
Strong brand names are important (210 5 Forces) If strong brands are critical to compete, then new competitors will have to improve their brand...
Advanced technologies are required (210 5 Forces) Advanced technologies make it difficult for new competitors to enter the market because they have to...
High learning curve (210 5 Forces) When the learning curve is high, new competitors must spend time and money studying the market...
Industry requires economies of scale (210 5 Forces) Economies of scale help producers to lower their cost by producing the next unit of output at lower...
Customers are loyal to existing brands (210 5 Forces) It takes time and money to build a brand. When companies need to spend resources building a brand,...
Entry barriers are high (210 5 Forces) 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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