Berkshire Hathaway - Five Forces Analysis

Berkshire Hathaway - Five Forces Analysis

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Intensity of Existing Rivalry

Fast industry growth rate (Berkshire Hathaway: Finance/Financial Products (Clayton Homes)) When industries are growing revenue quickly, they are less likely to compete, because the total...
Exit barriers are low (Berkshire Hathaway: Finance/Financial Products (Clayton Homes)) When exit barriers are low, weak firms are more likely to leave the market, which will increase the...

Bargaining Power of Suppliers

High competition among suppliers (Berkshire Hathaway: Finance/Financial Products (Clayton Homes)) High levels of competition among suppliers acts to reduce prices to producers. This is a positive...
Large number of substitute inputs (Berkshire Hathaway: Finance/Financial Products (Clayton Homes)) When there are a large number of substitute inputs, suppliers have less bargaining leverage over...

Threat of Substitutes

Substitute has lower performance (Berkshire Hathaway: Finance/Financial Products (Clayton Homes)) A lower performance product means a customer is less likely to switch from Berkshire Hathaway:...
Substitute is lower quality (Berkshire Hathaway: Finance/Financial Products (Clayton Homes)) A lower quality product means a customer is less likely to switch from Berkshire Hathaway:...
Substantial product differentiation (Berkshire Hathaway: Finance/Financial Products (Clayton Homes)) When products and services are very different, customers are less likely to find comparable product...
Limited number of substitutes (Berkshire Hathaway: Finance/Financial Products (Clayton Homes)) A limited number of substitutes mean that customers cannot easily find other products or services...

Bargaining Power of Customers

Product is important to customer (Berkshire Hathaway: Finance/Financial Products (Clayton Homes)) When customers cherish particular products they end up paying more for that one product. This...
Low dependency on distributors (Berkshire Hathaway: Finance/Financial Products (Clayton Homes)) When produces have low dependence, distributors have less bargaining power. Low dependency...

Threat of New Competitors

Strong distribution network required (Berkshire Hathaway: Finance/Financial Products (Clayton Homes)) Weak distribution networks mean goods are more expensive to move around and some goods don’t get to...
High sunk costs limit competition (Berkshire Hathaway: Finance/Financial Products (Clayton Homes)) High sunk costs make it difficult for a competitor to enter a new market, because they have to...
High capital requirements (Berkshire Hathaway: Finance/Financial Products (Clayton Homes)) High capital requirements mean a company must spend a lot of money in order to compete in the...
Strong brand names are important (Berkshire Hathaway: Finance/Financial Products (Clayton Homes)) If strong brands are critical to compete, then new competitors will have to improve their brand...
Geographic factors limit competition (Berkshire Hathaway: Finance/Financial Products (Clayton Homes)) If existing competitors have the best geographical locations, new competitors will have a...
Advanced technologies are required (Berkshire Hathaway: Finance/Financial Products (Clayton Homes)) Advanced technologies make it difficult for new competitors to enter the market because they have to...
Industry requires economies of scale (Berkshire Hathaway: Finance/Financial Products (Clayton Homes)) Economies of scale help producers to lower their cost by producing the next unit of output at lower...
Customers are loyal to existing brands (Berkshire Hathaway: Finance/Financial Products (Clayton Homes)) It takes time and money to build a brand. When companies need to spend resources building a brand,...

What is Porter's Five Forces Analysis?

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