MC 5 - Five Forces Analysis

MC 5 - Five Forces Analysis

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Intensity of Existing Rivalry

Relatively few competitors (MC 5) Few competitors mean fewer firms are competing for the same customers and resources, which is a...
Low storage costs (MC 5) When storage costs are low, competitors have a lower risk of having to unload their inventory all at...
Exit barriers are low (MC 5) When exit barriers are low, weak firms are more likely to leave the market, which will increase the...

Bargaining Power of Suppliers

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

Threat of Substitutes

Substitute is lower quality (MC 5) A lower quality product means a customer is less likely to switch from MC 5 to another product or...
Substitute product is inferior (MC 5) An inferior product means a customer is less likely to switch from MC 5 to another product or...
Limited number of substitutes (MC 5) A limited number of substitutes mean that customers cannot easily find other products or services...

Bargaining Power of Customers

Buyers require special customization (MC 5) When customers require special customizations, they are less likely to switch to producers who have...
Limited buyer choice (MC 5) When customers have limited choices they end up paying more for the choices that are available....
Product is important to customer (MC 5) When customers cherish particular products they end up paying more for that one product. This...

Threat of New Competitors

High capital requirements (MC 5) High capital requirements mean a company must spend a lot of money in order to compete in the...
Customers are loyal to existing brands (MC 5) It takes time and money to build a brand. When companies need to spend resources building a brand,...
Advanced technologies are required (MC 5) Advanced technologies make it difficult for new competitors to enter the market because they have to...
High learning curve (MC 5) When the learning curve is high, new competitors must spend time and money studying the market...

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