P5F - Five Forces Analysis

P5F - Five Forces Analysis

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Intensity of Existing Rivalry

Fast industry growth rate (P5F) When industries are growing revenue quickly, they are less likely to compete, because the total...
Relatively few competitors (P5F) Few competitors mean fewer firms are competing for the same customers and resources, which is a...
Government limits competition (P5F) Government policies and regulations can dictate the level of competition within the industry. When...
Large industry size (P5F) Large industries allow multiple firms and produces to prosper without having to steal market share...

Bargaining Power of Suppliers

High competition among suppliers (P5F) High levels of competition among suppliers acts to reduce prices to producers. This is a positive...
Critical production inputs are similar (P5F) When critical production inputs are similar, it is easier to mix and match inputs, which reduces...
Diverse distribution channel (P5F) The more diverse distribution channels become the less bargaining power a single distributor will...
Inputs have little impact on costs (P5F) When inputs are not a big component of costs, suppliers of those inputs have less bargaining power....

Threat of Substitutes

Limited number of substitutes (P5F) A limited number of substitutes mean that customers cannot easily find other products or services...

Bargaining Power of Customers

Limited buyer information availability (P5F) When buyers have limited information, they are at a disadvantage in negotiations with sellers....
Low dependency on distributors (P5F) When produces have low dependence, distributors have less bargaining power. Low dependency...
Product is important to customer (P5F) When customers cherish particular products they end up paying more for that one product. This...
Large number of customers (P5F) When there are large numbers of customers, no one customer tends to have bargaining leverage....
Limited buyer choice (P5F) When customers have limited choices they end up paying more for the choices that are available....

Threat of New Competitors

Strong distribution network required (P5F) Weak distribution networks mean goods are more expensive to move around and some goods don’t get to...
High capital requirements (P5F) High capital requirements mean a company must spend a lot of money in order to compete in the...
Strong brand names are important (P5F) If strong brands are critical to compete, then new competitors will have to improve their brand...
Advanced technologies are required (P5F) Advanced technologies make it difficult for new competitors to enter the market because they have to...
Industry requires economies of scale (P5F) Economies of scale help producers to lower their cost by producing the next unit of output at lower...
Patents limit new competition (P5F) Patents that cover vital technologies make it difficult for new competitors, because the best...
High switching costs for customers (P5F) High switching costs make it difficult for customers to change which products they normally...
Entry barriers are high (P5F) 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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