E1 - Five Forces Analysis

E1 - Five Forces Analysis

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Intensity of Existing Rivalry

Fast industry growth rate (E1) When industries are growing revenue quickly, they are less likely to compete, because the total...
Government limits competition (E1) Government policies and regulations can dictate the level of competition within the industry. When...
Relatively few competitors (E1) Few competitors mean fewer firms are competing for the same customers and resources, which is a...

Bargaining Power of Suppliers

Volume is critical to suppliers (E1) When suppliers are reliant on high volumes, they have less bargaining power, because a producer can...
Low cost of switching suppliers (E1) The easier it is to switch suppliers, the less bargaining power they have. Low supplier switching...

Threat of Substitutes

Limited number of substitutes (E1) A limited number of substitutes mean that customers cannot easily find other products or services...

Bargaining Power of Customers

Buyers require special customization (E1) When customers require special customizations, they are less likely to switch to producers who have...
Limited buyer information availability (E1) When buyers have limited information, they are at a disadvantage in negotiations with sellers....
Product is important to customer (E1) When customers cherish particular products they end up paying more for that one product. This...
Limited buyer choice (E1) When customers have limited choices they end up paying more for the choices that are available....

Threat of New Competitors

High capital requirements (E1) High capital requirements mean a company must spend a lot of money in order to compete in the...
Strong brand names are important (E1) If strong brands are critical to compete, then new competitors will have to improve their brand...
Patents limit new competition (E1) Patents that cover vital technologies make it difficult for new competitors, because the best...
Industry requires economies of scale (E1) Economies of scale help producers to lower their cost by producing the next unit of output at lower...
Customers are loyal to existing brands (E1) It takes time and money to build a brand. When companies need to spend resources building a brand,...
Entry barriers are high (E1) When barriers are high, it is more difficult for new competitors to enter the market. High entry...
High learning curve (E1) When the learning curve is high, new competitors must spend time and money studying the market...

What is Porter's Five Forces Analysis?

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