SlideShare ist ein Scribd-Unternehmen logo
1 von 16
Downloaden Sie, um offline zu lesen
PORTER’S
Forces
Model
Porter's Five Forces is a simple but
powerful tool for understanding the
competitiveness of your business
environment, and for identifying your
strategy's potential profitability.
https://www.mindtools.com/pages/article/newTMC_08.htm
Michael E. Porter (1979)
to analyze an industry's
attractiveness and likely
profitability
THE FIVE-FORCES MODEL OF
COMPETITION
3-4
THE FIVE-FORCES MODEL
Rivalry among competing firms
▪ Most powerful of the five forces
▪ Focus on competitive advantage of
strategies over other firms
Copyright©2017PearsonEducation,Inc.
3-5
TABLE 3-7 Conditions That Cause High Rivalry Among Competing Firms
▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
1. When the number of competing firms is high
2. When competing firms are of similar size
3. When competing firms have similar capabilities
4. When the demand for an industry’s products is falling
5. When the product or service prices in the industry are falling
6. When consumers can switch brands easily
7. When barriers to leaving the market are high
8. When barriers to entering the market are low
9. When fixed costs are high among competing firms
10. When the product is perishable
11. When rivals have excess capacity
12. When consumer demand is falling
13. When rivals have excess inventory
14. When rivals sell similar products/services
15. When mergers are common in the industry
Copyright©2017PearsonEducation,Inc.
3-6
THE FIVE-FORCES MODEL
Potential Entry of New Competitors
▪ Barriers to entry are important
▪ Quality, pricing, and marketing can
overcome barriers
Copyright©2017PearsonEducation,Inc.
3-7
BARRIERS TO ENTRY
▪ Need to gain economies of scale quickly
▪ Need to gain technology and specialized know-how
▪ Lack of experience
▪ Strong customer loyalty
▪ Strong brand preferences
▪ Large capital requirements
▪ Lack of adequate distribution channels
Copyright©2017PearsonEducation,Inc.
3-8
BARRIERS TO ENTRY
▪ Government regulatory policies
▪ Tariffs
▪ Lack of access to raw materials
▪ Possession of patents
▪ Undesirable locations
▪ Counterattack by entrenched firms
▪ Potential saturation of the market
Copyright©2017PearsonEducation,Inc.
3-9
THE FIVE-FORCES MODEL
Potential development of
substitute products
▪ Pressure increases when:
▪ Prices of substitutes decrease
▪ Consumers' switching costs
decrease
Copyright©2017PearsonEducation,Inc.
3-10
THE FIVE-FORCES MODEL
Bargaining Power of Suppliers
▪ increased when (there are):
▪ Few suppliers
▪ Few substitutes
▪ Costs of switching raw materials is
high
Copyright©2017PearsonEducation,Inc.
3-11
THE FIVE-FORCES MODEL
Bargaining power of consumers
▪ Customers being concentrated or
buying in volume affects intensity
of competition
▪ Consumer power is higher where
products are standard or
undifferentiated
Copyright©2017PearsonEducation,Inc.
3-12
CONDITIONS WHERE CONSUMERS
GAIN BARGAINING POWER
1. If buyers can inexpensively switch
2. If buyers are particularly important
3. If sellers are struggling in the face of falling
consumer demand
4. If buyers are informed about sellers' products,
prices, and costs
5. If buyers have discretion in whether and when
they purchase the product
Copyright©2017PearsonEducation,Inc.
3-13
Sample Five-forces
Model Analysis
Extremely
High
Low Medium
Low
Low
Thank you.

Weitere ähnliche Inhalte

Was ist angesagt?

NATURE & SCOPE OF MARKETING RESEARCH
NATURE & SCOPE OF MARKETING RESEARCHNATURE & SCOPE OF MARKETING RESEARCH
NATURE & SCOPE OF MARKETING RESEARCHSagar Anand
 
Market opportunity analysis
Market opportunity analysisMarket opportunity analysis
Market opportunity analysisgihan aboueleish
 
Understanding markets
Understanding marketsUnderstanding markets
Understanding marketsgemdeane1
 
Chapter 3 the external assessment
Chapter 3   the external assessmentChapter 3   the external assessment
Chapter 3 the external assessmentMervyn Maico Aldana
 
Chapter 2 Developing Marketing Strategies and Plans
Chapter 2 Developing Marketing Strategies and PlansChapter 2 Developing Marketing Strategies and Plans
Chapter 2 Developing Marketing Strategies and PlansNishant Agrawal
 
Marketing research
Marketing research Marketing research
Marketing research SumitKangra
 
Environmental scanning-ppt
Environmental scanning-pptEnvironmental scanning-ppt
Environmental scanning-ppt16119843
 
Strategic analysis and choice
Strategic analysis and choice Strategic analysis and choice
Strategic analysis and choice Krishna Kumar Paul
 
Chapter-5 Industry and competitor analysis
Chapter-5 Industry and competitor analysisChapter-5 Industry and competitor analysis
Chapter-5 Industry and competitor analysisAfzaal Ali
 
Unique selling proposition and value proposition
Unique selling proposition and value propositionUnique selling proposition and value proposition
Unique selling proposition and value propositionJohemie Lopez Quinones
 
Developing Marketing Strategies and Plans
Developing Marketing Strategies and PlansDeveloping Marketing Strategies and Plans
Developing Marketing Strategies and PlansKoichiTachiya
 
Account and Planning Research
Account and Planning ResearchAccount and Planning Research
Account and Planning ResearchJeanpot Diongon
 
Porter's Five Forces
Porter's Five ForcesPorter's Five Forces
Porter's Five ForcesMayur Khatri
 
Developing Marketing Strategies and Plans / Marketing Management By Kotler K...
Developing Marketing Strategies and Plans / Marketing Management By Kotler K...Developing Marketing Strategies and Plans / Marketing Management By Kotler K...
Developing Marketing Strategies and Plans / Marketing Management By Kotler K...Choudhry Asad
 

Was ist angesagt? (20)

Industry analysis
Industry analysisIndustry analysis
Industry analysis
 
Market Analysis
Market AnalysisMarket Analysis
Market Analysis
 
NATURE & SCOPE OF MARKETING RESEARCH
NATURE & SCOPE OF MARKETING RESEARCHNATURE & SCOPE OF MARKETING RESEARCH
NATURE & SCOPE OF MARKETING RESEARCH
 
Market opportunity analysis
Market opportunity analysisMarket opportunity analysis
Market opportunity analysis
 
Strategic Marketing
Strategic Marketing Strategic Marketing
Strategic Marketing
 
Understanding markets
Understanding marketsUnderstanding markets
Understanding markets
 
Chapter 3 the external assessment
Chapter 3   the external assessmentChapter 3   the external assessment
Chapter 3 the external assessment
 
Competitor Analysis
Competitor AnalysisCompetitor Analysis
Competitor Analysis
 
Chapter 2 Developing Marketing Strategies and Plans
Chapter 2 Developing Marketing Strategies and PlansChapter 2 Developing Marketing Strategies and Plans
Chapter 2 Developing Marketing Strategies and Plans
 
Marketing research
Marketing research Marketing research
Marketing research
 
Product positioning ppt
Product positioning pptProduct positioning ppt
Product positioning ppt
 
Environmental scanning-ppt
Environmental scanning-pptEnvironmental scanning-ppt
Environmental scanning-ppt
 
Strategic analysis and choice
Strategic analysis and choice Strategic analysis and choice
Strategic analysis and choice
 
Chapter 1 - Introduction to Consumer Behavior
Chapter 1 - Introduction to Consumer Behavior Chapter 1 - Introduction to Consumer Behavior
Chapter 1 - Introduction to Consumer Behavior
 
Chapter-5 Industry and competitor analysis
Chapter-5 Industry and competitor analysisChapter-5 Industry and competitor analysis
Chapter-5 Industry and competitor analysis
 
Unique selling proposition and value proposition
Unique selling proposition and value propositionUnique selling proposition and value proposition
Unique selling proposition and value proposition
 
Developing Marketing Strategies and Plans
Developing Marketing Strategies and PlansDeveloping Marketing Strategies and Plans
Developing Marketing Strategies and Plans
 
Account and Planning Research
Account and Planning ResearchAccount and Planning Research
Account and Planning Research
 
Porter's Five Forces
Porter's Five ForcesPorter's Five Forces
Porter's Five Forces
 
Developing Marketing Strategies and Plans / Marketing Management By Kotler K...
Developing Marketing Strategies and Plans / Marketing Management By Kotler K...Developing Marketing Strategies and Plans / Marketing Management By Kotler K...
Developing Marketing Strategies and Plans / Marketing Management By Kotler K...
 

Ähnlich wie Porter's 5 Forces Model

Building Your Competitve Advantabe by Jim Butler
Building Your Competitve Advantabe by Jim ButlerBuilding Your Competitve Advantabe by Jim Butler
Building Your Competitve Advantabe by Jim ButlerAnitaBell
 
www.hbrreprints.orgThe Five Competitive Forces That Sh.docx
www.hbrreprints.orgThe Five Competitive Forces That Sh.docxwww.hbrreprints.orgThe Five Competitive Forces That Sh.docx
www.hbrreprints.orgThe Five Competitive Forces That Sh.docxjeffevans62972
 
barringer_e3_ppt_05.ppt
barringer_e3_ppt_05.pptbarringer_e3_ppt_05.ppt
barringer_e3_ppt_05.pptTayyebAthar1
 
What does success look like in your industry how do you get top
What does success look like   in your industry how do you   get topWhat does success look like   in your industry how do you   get top
What does success look like in your industry how do you get topLeul Girma
 
www.hbrreprints.orgThe Five Competitive Forces That Sh.docx
www.hbrreprints.orgThe Five Competitive Forces That Sh.docxwww.hbrreprints.orgThe Five Competitive Forces That Sh.docx
www.hbrreprints.orgThe Five Competitive Forces That Sh.docxodiliagilby
 
Michael porter’s
Michael porter’sMichael porter’s
Michael porter’sjyoti goyal
 
Entrepreneurship Recognize Market-2.pptx
Entrepreneurship Recognize Market-2.pptxEntrepreneurship Recognize Market-2.pptx
Entrepreneurship Recognize Market-2.pptxCleofeMaghinay3
 
business level strategy in English
 business level strategy in English business level strategy in English
business level strategy in EnglishYesica Adicondro
 
Business level strategy
Business level strategyBusiness level strategy
Business level strategyAshesh Anand
 
Strategies in ActionChapter FiveChapter Objectiv.docx
Strategies in ActionChapter FiveChapter Objectiv.docxStrategies in ActionChapter FiveChapter Objectiv.docx
Strategies in ActionChapter FiveChapter Objectiv.docxflorriezhamphrey3065
 
Porter five forces analysis
Porter five forces analysisPorter five forces analysis
Porter five forces analysisMasih Nabizadeh
 
Week 4 Discussion_ BUS 599A Rotten Apple  Please respond.docx
Week 4 Discussion_ BUS 599A Rotten Apple  Please respond.docxWeek 4 Discussion_ BUS 599A Rotten Apple  Please respond.docx
Week 4 Discussion_ BUS 599A Rotten Apple  Please respond.docxcockekeshia
 

Ähnlich wie Porter's 5 Forces Model (20)

Ch 11 competitive dynamics14e
Ch 11 competitive dynamics14eCh 11 competitive dynamics14e
Ch 11 competitive dynamics14e
 
Building Your Competitve Advantabe by Jim Butler
Building Your Competitve Advantabe by Jim ButlerBuilding Your Competitve Advantabe by Jim Butler
Building Your Competitve Advantabe by Jim Butler
 
Porter-HBR.pdf
Porter-HBR.pdfPorter-HBR.pdf
Porter-HBR.pdf
 
Barringer-Chapter5.ppt
Barringer-Chapter5.pptBarringer-Chapter5.ppt
Barringer-Chapter5.ppt
 
strm04.ppt
strm04.pptstrm04.ppt
strm04.ppt
 
www.hbrreprints.orgThe Five Competitive Forces That Sh.docx
www.hbrreprints.orgThe Five Competitive Forces That Sh.docxwww.hbrreprints.orgThe Five Competitive Forces That Sh.docx
www.hbrreprints.orgThe Five Competitive Forces That Sh.docx
 
barringer_e3_ppt_05.ppt
barringer_e3_ppt_05.pptbarringer_e3_ppt_05.ppt
barringer_e3_ppt_05.ppt
 
What does success look like in your industry how do you get top
What does success look like   in your industry how do you   get topWhat does success look like   in your industry how do you   get top
What does success look like in your industry how do you get top
 
www.hbrreprints.orgThe Five Competitive Forces That Sh.docx
www.hbrreprints.orgThe Five Competitive Forces That Sh.docxwww.hbrreprints.orgThe Five Competitive Forces That Sh.docx
www.hbrreprints.orgThe Five Competitive Forces That Sh.docx
 
INDUSTRYANALYSIS.pptx
INDUSTRYANALYSIS.pptxINDUSTRYANALYSIS.pptx
INDUSTRYANALYSIS.pptx
 
Michael porter’s
Michael porter’sMichael porter’s
Michael porter’s
 
Entrepreneurship Recognize Market-2.pptx
Entrepreneurship Recognize Market-2.pptxEntrepreneurship Recognize Market-2.pptx
Entrepreneurship Recognize Market-2.pptx
 
business level strategy in English
 business level strategy in English business level strategy in English
business level strategy in English
 
Business level strategy
Business level strategyBusiness level strategy
Business level strategy
 
Strategies in ActionChapter FiveChapter Objectiv.docx
Strategies in ActionChapter FiveChapter Objectiv.docxStrategies in ActionChapter FiveChapter Objectiv.docx
Strategies in ActionChapter FiveChapter Objectiv.docx
 
Bpch3
Bpch3Bpch3
Bpch3
 
Porter five forces analysis
Porter five forces analysisPorter five forces analysis
Porter five forces analysis
 
Ch16
Ch16Ch16
Ch16
 
Week 4 Discussion_ BUS 599A Rotten Apple  Please respond.docx
Week 4 Discussion_ BUS 599A Rotten Apple  Please respond.docxWeek 4 Discussion_ BUS 599A Rotten Apple  Please respond.docx
Week 4 Discussion_ BUS 599A Rotten Apple  Please respond.docx
 
david _sm16_ppt05.pptx
david _sm16_ppt05.pptxdavid _sm16_ppt05.pptx
david _sm16_ppt05.pptx
 

Kürzlich hochgeladen

CapTechU Doctoral Presentation -March 2024 slides.pptx
CapTechU Doctoral Presentation -March 2024 slides.pptxCapTechU Doctoral Presentation -March 2024 slides.pptx
CapTechU Doctoral Presentation -March 2024 slides.pptxCapitolTechU
 
Practical Research 1: Lesson 8 Writing the Thesis Statement.pptx
Practical Research 1: Lesson 8 Writing the Thesis Statement.pptxPractical Research 1: Lesson 8 Writing the Thesis Statement.pptx
Practical Research 1: Lesson 8 Writing the Thesis Statement.pptxKatherine Villaluna
 
Diploma in Nursing Admission Test Question Solution 2023.pdf
Diploma in Nursing Admission Test Question Solution 2023.pdfDiploma in Nursing Admission Test Question Solution 2023.pdf
Diploma in Nursing Admission Test Question Solution 2023.pdfMohonDas
 
Human-AI Co-Creation of Worked Examples for Programming Classes
Human-AI Co-Creation of Worked Examples for Programming ClassesHuman-AI Co-Creation of Worked Examples for Programming Classes
Human-AI Co-Creation of Worked Examples for Programming ClassesMohammad Hassany
 
Ultra structure and life cycle of Plasmodium.pptx
Ultra structure and life cycle of Plasmodium.pptxUltra structure and life cycle of Plasmodium.pptx
Ultra structure and life cycle of Plasmodium.pptxDr. Asif Anas
 
2024.03.23 What do successful readers do - Sandy Millin for PARK.pptx
2024.03.23 What do successful readers do - Sandy Millin for PARK.pptx2024.03.23 What do successful readers do - Sandy Millin for PARK.pptx
2024.03.23 What do successful readers do - Sandy Millin for PARK.pptxSandy Millin
 
How to Use api.constrains ( ) in Odoo 17
How to Use api.constrains ( ) in Odoo 17How to Use api.constrains ( ) in Odoo 17
How to Use api.constrains ( ) in Odoo 17Celine George
 
CHUYÊN ĐỀ DẠY THÊM TIẾNG ANH LỚP 11 - GLOBAL SUCCESS - NĂM HỌC 2023-2024 - HK...
CHUYÊN ĐỀ DẠY THÊM TIẾNG ANH LỚP 11 - GLOBAL SUCCESS - NĂM HỌC 2023-2024 - HK...CHUYÊN ĐỀ DẠY THÊM TIẾNG ANH LỚP 11 - GLOBAL SUCCESS - NĂM HỌC 2023-2024 - HK...
CHUYÊN ĐỀ DẠY THÊM TIẾNG ANH LỚP 11 - GLOBAL SUCCESS - NĂM HỌC 2023-2024 - HK...Nguyen Thanh Tu Collection
 
What is the Future of QuickBooks DeskTop?
What is the Future of QuickBooks DeskTop?What is the Future of QuickBooks DeskTop?
What is the Future of QuickBooks DeskTop?TechSoup
 
Practical Research 1 Lesson 9 Scope and delimitation.pptx
Practical Research 1 Lesson 9 Scope and delimitation.pptxPractical Research 1 Lesson 9 Scope and delimitation.pptx
Practical Research 1 Lesson 9 Scope and delimitation.pptxKatherine Villaluna
 
HED Office Sohayok Exam Question Solution 2023.pdf
HED Office Sohayok Exam Question Solution 2023.pdfHED Office Sohayok Exam Question Solution 2023.pdf
HED Office Sohayok Exam Question Solution 2023.pdfMohonDas
 
The basics of sentences session 10pptx.pptx
The basics of sentences session 10pptx.pptxThe basics of sentences session 10pptx.pptx
The basics of sentences session 10pptx.pptxheathfieldcps1
 
5 charts on South Africa as a source country for international student recrui...
5 charts on South Africa as a source country for international student recrui...5 charts on South Africa as a source country for international student recrui...
5 charts on South Africa as a source country for international student recrui...CaraSkikne1
 
Quality Assurance_GOOD LABORATORY PRACTICE
Quality Assurance_GOOD LABORATORY PRACTICEQuality Assurance_GOOD LABORATORY PRACTICE
Quality Assurance_GOOD LABORATORY PRACTICESayali Powar
 
Clinical Pharmacy Introduction to Clinical Pharmacy, Concept of clinical pptx
Clinical Pharmacy  Introduction to Clinical Pharmacy, Concept of clinical pptxClinical Pharmacy  Introduction to Clinical Pharmacy, Concept of clinical pptx
Clinical Pharmacy Introduction to Clinical Pharmacy, Concept of clinical pptxraviapr7
 
3.21.24 The Origins of Black Power.pptx
3.21.24  The Origins of Black Power.pptx3.21.24  The Origins of Black Power.pptx
3.21.24 The Origins of Black Power.pptxmary850239
 
Benefits & Challenges of Inclusive Education
Benefits & Challenges of Inclusive EducationBenefits & Challenges of Inclusive Education
Benefits & Challenges of Inclusive EducationMJDuyan
 
The Stolen Bacillus by Herbert George Wells
The Stolen Bacillus by Herbert George WellsThe Stolen Bacillus by Herbert George Wells
The Stolen Bacillus by Herbert George WellsEugene Lysak
 

Kürzlich hochgeladen (20)

CapTechU Doctoral Presentation -March 2024 slides.pptx
CapTechU Doctoral Presentation -March 2024 slides.pptxCapTechU Doctoral Presentation -March 2024 slides.pptx
CapTechU Doctoral Presentation -March 2024 slides.pptx
 
Practical Research 1: Lesson 8 Writing the Thesis Statement.pptx
Practical Research 1: Lesson 8 Writing the Thesis Statement.pptxPractical Research 1: Lesson 8 Writing the Thesis Statement.pptx
Practical Research 1: Lesson 8 Writing the Thesis Statement.pptx
 
Diploma in Nursing Admission Test Question Solution 2023.pdf
Diploma in Nursing Admission Test Question Solution 2023.pdfDiploma in Nursing Admission Test Question Solution 2023.pdf
Diploma in Nursing Admission Test Question Solution 2023.pdf
 
Human-AI Co-Creation of Worked Examples for Programming Classes
Human-AI Co-Creation of Worked Examples for Programming ClassesHuman-AI Co-Creation of Worked Examples for Programming Classes
Human-AI Co-Creation of Worked Examples for Programming Classes
 
Ultra structure and life cycle of Plasmodium.pptx
Ultra structure and life cycle of Plasmodium.pptxUltra structure and life cycle of Plasmodium.pptx
Ultra structure and life cycle of Plasmodium.pptx
 
2024.03.23 What do successful readers do - Sandy Millin for PARK.pptx
2024.03.23 What do successful readers do - Sandy Millin for PARK.pptx2024.03.23 What do successful readers do - Sandy Millin for PARK.pptx
2024.03.23 What do successful readers do - Sandy Millin for PARK.pptx
 
How to Use api.constrains ( ) in Odoo 17
How to Use api.constrains ( ) in Odoo 17How to Use api.constrains ( ) in Odoo 17
How to Use api.constrains ( ) in Odoo 17
 
CHUYÊN ĐỀ DẠY THÊM TIẾNG ANH LỚP 11 - GLOBAL SUCCESS - NĂM HỌC 2023-2024 - HK...
CHUYÊN ĐỀ DẠY THÊM TIẾNG ANH LỚP 11 - GLOBAL SUCCESS - NĂM HỌC 2023-2024 - HK...CHUYÊN ĐỀ DẠY THÊM TIẾNG ANH LỚP 11 - GLOBAL SUCCESS - NĂM HỌC 2023-2024 - HK...
CHUYÊN ĐỀ DẠY THÊM TIẾNG ANH LỚP 11 - GLOBAL SUCCESS - NĂM HỌC 2023-2024 - HK...
 
What is the Future of QuickBooks DeskTop?
What is the Future of QuickBooks DeskTop?What is the Future of QuickBooks DeskTop?
What is the Future of QuickBooks DeskTop?
 
Practical Research 1 Lesson 9 Scope and delimitation.pptx
Practical Research 1 Lesson 9 Scope and delimitation.pptxPractical Research 1 Lesson 9 Scope and delimitation.pptx
Practical Research 1 Lesson 9 Scope and delimitation.pptx
 
HED Office Sohayok Exam Question Solution 2023.pdf
HED Office Sohayok Exam Question Solution 2023.pdfHED Office Sohayok Exam Question Solution 2023.pdf
HED Office Sohayok Exam Question Solution 2023.pdf
 
The basics of sentences session 10pptx.pptx
The basics of sentences session 10pptx.pptxThe basics of sentences session 10pptx.pptx
The basics of sentences session 10pptx.pptx
 
Personal Resilience in Project Management 2 - TV Edit 1a.pdf
Personal Resilience in Project Management 2 - TV Edit 1a.pdfPersonal Resilience in Project Management 2 - TV Edit 1a.pdf
Personal Resilience in Project Management 2 - TV Edit 1a.pdf
 
5 charts on South Africa as a source country for international student recrui...
5 charts on South Africa as a source country for international student recrui...5 charts on South Africa as a source country for international student recrui...
5 charts on South Africa as a source country for international student recrui...
 
Prelims of Kant get Marx 2.0: a general politics quiz
Prelims of Kant get Marx 2.0: a general politics quizPrelims of Kant get Marx 2.0: a general politics quiz
Prelims of Kant get Marx 2.0: a general politics quiz
 
Quality Assurance_GOOD LABORATORY PRACTICE
Quality Assurance_GOOD LABORATORY PRACTICEQuality Assurance_GOOD LABORATORY PRACTICE
Quality Assurance_GOOD LABORATORY PRACTICE
 
Clinical Pharmacy Introduction to Clinical Pharmacy, Concept of clinical pptx
Clinical Pharmacy  Introduction to Clinical Pharmacy, Concept of clinical pptxClinical Pharmacy  Introduction to Clinical Pharmacy, Concept of clinical pptx
Clinical Pharmacy Introduction to Clinical Pharmacy, Concept of clinical pptx
 
3.21.24 The Origins of Black Power.pptx
3.21.24  The Origins of Black Power.pptx3.21.24  The Origins of Black Power.pptx
3.21.24 The Origins of Black Power.pptx
 
Benefits & Challenges of Inclusive Education
Benefits & Challenges of Inclusive EducationBenefits & Challenges of Inclusive Education
Benefits & Challenges of Inclusive Education
 
The Stolen Bacillus by Herbert George Wells
The Stolen Bacillus by Herbert George WellsThe Stolen Bacillus by Herbert George Wells
The Stolen Bacillus by Herbert George Wells
 

Porter's 5 Forces Model

  • 2. Porter's Five Forces is a simple but powerful tool for understanding the competitiveness of your business environment, and for identifying your strategy's potential profitability. https://www.mindtools.com/pages/article/newTMC_08.htm
  • 3. Michael E. Porter (1979) to analyze an industry's attractiveness and likely profitability
  • 4. THE FIVE-FORCES MODEL OF COMPETITION 3-4
  • 5. THE FIVE-FORCES MODEL Rivalry among competing firms ▪ Most powerful of the five forces ▪ Focus on competitive advantage of strategies over other firms Copyright©2017PearsonEducation,Inc. 3-5
  • 6. TABLE 3-7 Conditions That Cause High Rivalry Among Competing Firms ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬ 1. When the number of competing firms is high 2. When competing firms are of similar size 3. When competing firms have similar capabilities 4. When the demand for an industry’s products is falling 5. When the product or service prices in the industry are falling 6. When consumers can switch brands easily 7. When barriers to leaving the market are high 8. When barriers to entering the market are low 9. When fixed costs are high among competing firms 10. When the product is perishable 11. When rivals have excess capacity 12. When consumer demand is falling 13. When rivals have excess inventory 14. When rivals sell similar products/services 15. When mergers are common in the industry Copyright©2017PearsonEducation,Inc. 3-6
  • 7. THE FIVE-FORCES MODEL Potential Entry of New Competitors ▪ Barriers to entry are important ▪ Quality, pricing, and marketing can overcome barriers Copyright©2017PearsonEducation,Inc. 3-7
  • 8. BARRIERS TO ENTRY ▪ Need to gain economies of scale quickly ▪ Need to gain technology and specialized know-how ▪ Lack of experience ▪ Strong customer loyalty ▪ Strong brand preferences ▪ Large capital requirements ▪ Lack of adequate distribution channels Copyright©2017PearsonEducation,Inc. 3-8
  • 9. BARRIERS TO ENTRY ▪ Government regulatory policies ▪ Tariffs ▪ Lack of access to raw materials ▪ Possession of patents ▪ Undesirable locations ▪ Counterattack by entrenched firms ▪ Potential saturation of the market Copyright©2017PearsonEducation,Inc. 3-9
  • 10. THE FIVE-FORCES MODEL Potential development of substitute products ▪ Pressure increases when: ▪ Prices of substitutes decrease ▪ Consumers' switching costs decrease Copyright©2017PearsonEducation,Inc. 3-10
  • 11. THE FIVE-FORCES MODEL Bargaining Power of Suppliers ▪ increased when (there are): ▪ Few suppliers ▪ Few substitutes ▪ Costs of switching raw materials is high Copyright©2017PearsonEducation,Inc. 3-11
  • 12. THE FIVE-FORCES MODEL Bargaining power of consumers ▪ Customers being concentrated or buying in volume affects intensity of competition ▪ Consumer power is higher where products are standard or undifferentiated Copyright©2017PearsonEducation,Inc. 3-12
  • 13. CONDITIONS WHERE CONSUMERS GAIN BARGAINING POWER 1. If buyers can inexpensively switch 2. If buyers are particularly important 3. If sellers are struggling in the face of falling consumer demand 4. If buyers are informed about sellers' products, prices, and costs 5. If buyers have discretion in whether and when they purchase the product Copyright©2017PearsonEducation,Inc. 3-13