Cosmetics Manufacturing 2007 - Five Forces Analysis

Cosmetics Manufacturing 2007 - Five Forces Analysis

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Intensity of Existing Rivalry

Relatively few competitors (Cosmetics Manufacturing 2007) Few competitors mean fewer firms are competing for the same customers and resources, which is a...
Exit barriers are low (Cosmetics Manufacturing 2007) When exit barriers are low, weak firms are more likely to leave the market, which will increase the...
Large industry size (Cosmetics Manufacturing 2007) Large industries allow multiple firms and produces to prosper without having to steal market share...

Bargaining Power of Suppliers

High competition among suppliers (Cosmetics Manufacturing 2007) High levels of competition among suppliers acts to reduce prices to producers. This is a positive...
Low cost of switching suppliers (Cosmetics Manufacturing 2007) The easier it is to switch suppliers, the less bargaining power they have. Low supplier switching...
Volume is critical to suppliers (Cosmetics Manufacturing 2007) When suppliers are reliant on high volumes, they have less bargaining power, because a producer can...
Low concentration of suppliers (Cosmetics Manufacturing 2007) A low concentration of suppliers means there are many suppliers with limited bargaining power. Low...
Diverse distribution channel (Cosmetics Manufacturing 2007) The more diverse distribution channels become the less bargaining power a single distributor will...

Threat of Substitutes

Substitute product is inferior (Cosmetics Manufacturing 2007) An inferior product means a customer is less likely to switch from Cosmetics Manufacturing 2007 to...
Limited number of substitutes (Cosmetics Manufacturing 2007) A limited number of substitutes mean that customers cannot easily find other products or services...

Bargaining Power of Customers

Buyers require special customization (Cosmetics Manufacturing 2007) When customers require special customizations, they are less likely to switch to producers who have...
Low buyer price sensitivity (Cosmetics Manufacturing 2007) When buyers are less sensitive to prices, prices can increase and buyers will still buy the product....
Product is important to customer (Cosmetics Manufacturing 2007) When customers cherish particular products they end up paying more for that one product. This...
Large number of customers (Cosmetics Manufacturing 2007) When there are large numbers of customers, no one customer tends to have bargaining leverage....

Threat of New Competitors

Strong distribution network required (Cosmetics Manufacturing 2007) Weak distribution networks mean goods are more expensive to move around and some goods don’t get to...
Strong brand names are important (Cosmetics Manufacturing 2007) If strong brands are critical to compete, then new competitors will have to improve their brand...
High sunk costs limit competition (Cosmetics Manufacturing 2007) High sunk costs make it difficult for a competitor to enter a new market, because they have to...
Customers are loyal to existing brands (Cosmetics Manufacturing 2007) It takes time and money to build a brand. When companies need to spend resources building a brand,...
Industry requires economies of scale (Cosmetics Manufacturing 2007) Economies of scale help producers to lower their cost by producing the next unit of output at lower...
Entry barriers are high (Cosmetics Manufacturing 2007) 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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