AIM - Five Forces Analysis

AIM - Five Forces Analysis

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Intensity of Existing Rivalry

Fast industry growth rate (AIM) When industries are growing revenue quickly, they are less likely to compete, because the total...
Relatively few competitors (AIM) Few competitors mean fewer firms are competing for the same customers and resources, which is a...

Bargaining Power of Suppliers

High competition among suppliers (AIM) High levels of competition among suppliers acts to reduce prices to producers. This is a positive...
Low cost of switching suppliers (AIM) The easier it is to switch suppliers, the less bargaining power they have. Low supplier switching...
Inputs have little impact on costs (AIM) When inputs are not a big component of costs, suppliers of those inputs have less bargaining power....

Threat of Substitutes

Substitute product is inferior (AIM) An inferior product means a customer is less likely to switch from AIM to another product or...
Limited number of substitutes (AIM) A limited number of substitutes mean that customers cannot easily find other products or services...

Bargaining Power of Customers

Limited buyer information availability (AIM) When buyers have limited information, they are at a disadvantage in negotiations with sellers....
Low dependency on distributors (AIM) When produces have low dependence, distributors have less bargaining power. Low dependency...
Limited buyer choice (AIM) When customers have limited choices they end up paying more for the choices that are available....

Threat of New Competitors

Industry requires economies of scale (AIM) Economies of scale help producers to lower their cost by producing the next unit of output at lower...
Geographic factors limit competition (AIM) If existing competitors have the best geographical locations, new competitors will have a...
Advanced technologies are required (AIM) Advanced technologies make it difficult for new competitors to enter the market because they have to...
Entry barriers are high (AIM) 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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