Porters Five Forces
BARRIERS TO ENTRY
Economies of scale. Absolute cost The goal of competitive strategy for a
Proprietary product advantages:
differences. Proprietary business unit in an industry is to find a position
Brand identity. learning curve. in the industry where the company can best
Switching costs. Access to
Capital requirements. necessary inputs. defend itself against these competitive forces
Access to distribution Proprietary low-
channels. cost product or can influence them in its favour.
design. Micheal Porter
Government policy.
Expected retaliation.
IMPACT OF SUPPLIERS INTERNAL INDUSTRY RIVALRY IMPACT OF BUYERS
Differentiation of Cost relative to total Industry growth. Informational Bargaining leverage. Substitute products.
inputs. purchases in the Fixed (or storage) complexity. Buyer concentration Pull-through.
Switching costs of industry. costs/ value added. Diversity of vs. firm Price sensitivity.
suppliers and firms in Impact of inputs on Intermittent competitors. concentration. Price / total purchases.
the industry. cost or differentiation. overcapacity. Corporate stakes. Buyer volume. Product differences.
Presence of Threat of forward Product differences. Exit barriers. Buyer switching costs Brand identity.
substitute inputs. integration relative to Brand identity. relative to firm Impact on quality /
Supplier threat of backward Switching costs. switching costs. performance.
concentration. integration by firms in Buyer information.
the industry.
Concentration and Buyer profits.
Importance of balance. Ability to backward Decision-makers
volume to supplier. integrate. incentives.
SUBSTITUTE PRODUCTS
Relative price
performance of
substitutes.
Switching costs.
Buyer propensity to
This is a free resource from substitute.
[Link] which contains lots more
useful tools, templates and resources
Not to be sold or published.
[Link] 1
Porters Five Forces
BARRIERS TO ENTRY
Economies of scale.
The goal of competitive strategy for a Proprietary product differences.
business unit in an industry is to find a Brand identity.
Switching costs.
position in the industry where the Capital requirements.
company can best defend itself Access to distribution channels.
against these competitive forces or Absolute cost advantages:
Proprietary learning curve.
can influence them in its favour. Access to necessary inputs.
Micheal Porter Proprietary low-cost product design.
Government policy.
Expected retaliation.
IMPACT OF SUPPLIERS IMPACT OF BUYERS
Differentiation of inputs. Bargaining leverage.
Switching costs of suppliers and firms in the Buyer concentration vs. firm concentration.
industry. Buyer volume.
Presence of substitute inputs. INTERNAL INDUSTRY RIVALRY Buyer switching costs relative to firm
Supplier concentration. Industry growth. switching costs.
Importance of volume to supplier. Fixed (or storage) costs / value added. Buyer information.
Cost relative to total purchases in the Intermittent overcapacity. Ability to backward integrate.
industry. Product differences. Substitute products.
Impact of inputs on cost or differentiation. Brand identity. Pull-through.
Threat of forward integration relative to Switching costs. Price sensitivity.
threat of backward integration by firms in Concentration and balance. Price / total purchases.
the industry. Informational complexity. Product differences.
Diversity of competitors. Brand identity.
Corporate stakes. Impact on quality / performance.
Exit barriers. Buyer profits.
Decision-makers incentives.
SUBSTITUTE PRODUCTS
Relative price performance of substitutes.
Switching costs.
Buyer propensity to substitute.
This is a free resource from
[Link] which contains lots more
useful tools, templates and resources
Not to be sold or published.
[Link] 2
