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Porter’s five forces

                    Supplier power


Barriers to entry
                       Rivalry       Threat of substitutes



                     Buyer power
Porter’s five forces
                    Rivalry
 Strive for a competitive advantage
 Market share
 Change prices
 Improve product differentiation
 Creativity using channels of distribution
 Exploiting relationships with suppliers
Porter’s five forces
   The intensity of rivalry is influenced by the
    following characteristics:
       Slow market growth
       A large number of firms
       High fixed costs
       High storage costs or highly perishable
        products
       Low switching costs
       Low levels of product differentiation
       Strategic stakes are high
Porter’s five forces forces
   Continued
       High exit barriers
       A diversity of rivals
       Industry shakeout
Porter’s five forces
 The threat of substitutes
 Price elasticity is affected by substitute
  products
 discuss
Porter’s five forces
 Buyer power
 What is a monopaony?
 The buyer sets the price?
 What sets buyer power?
Porter’s five forces
 Supplier power
 What determines supplier power?
 discuss
Porter’s five forces
 Barriers to entry
 Do governments create barriers?
Porter’s five forces
 Patents
 What happens here?
 discuss
Porter’s five forces
 Organizational (internal) economies of
  scale
 What is the relationship between
  “Minimum efficient scale” (MES) and
  market share?
Porter’s five forces
 Reference
 Competitive strategy by
 Michael Porter

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1 porters five forces

  • 1. Porter’s five forces Supplier power Barriers to entry Rivalry Threat of substitutes Buyer power
  • 2. Porter’s five forces  Rivalry  Strive for a competitive advantage  Market share  Change prices  Improve product differentiation  Creativity using channels of distribution  Exploiting relationships with suppliers
  • 3. Porter’s five forces  The intensity of rivalry is influenced by the following characteristics:  Slow market growth  A large number of firms  High fixed costs  High storage costs or highly perishable products  Low switching costs  Low levels of product differentiation  Strategic stakes are high
  • 4. Porter’s five forces forces  Continued  High exit barriers  A diversity of rivals  Industry shakeout
  • 5. Porter’s five forces  The threat of substitutes  Price elasticity is affected by substitute products  discuss
  • 6. Porter’s five forces  Buyer power  What is a monopaony?  The buyer sets the price?  What sets buyer power?
  • 7. Porter’s five forces  Supplier power  What determines supplier power?  discuss
  • 8. Porter’s five forces  Barriers to entry  Do governments create barriers?
  • 9. Porter’s five forces  Patents  What happens here?  discuss
  • 10. Porter’s five forces  Organizational (internal) economies of scale  What is the relationship between “Minimum efficient scale” (MES) and market share?
  • 11. Porter’s five forces  Reference  Competitive strategy by  Michael Porter