PPT On Porter’s 5 Forces

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Porter’s 5 Forces Presentation Transcript:
1.Porter’s 5 forces

2.Threat of new entrants
Rivalry among existing firms
Threat of substitute products
Bargaining power of buyers
Bargaining power of suppliers

3.Threat of new entrants-
new entrants to an industry bring new capacity, a desire to gain market share and substantial resources

4.
Entry barrier- an obstruction that makes it difficult for a company to enter an industry
Economies of scale
Product differentiation
Capital requirements
Switching costs

5.
Rivalry Among Existing Firms- new entrants to an industry bring new capacity, a desire to gain market share and substantial resources
Number of competitors
Rate of industry growth
Product or service characteristics
Amount of fixed costs
Capacity

6.Threat of Substitute Products or Services-
products that appear different but can satisfy the same need as another product

7.
Bargaining Power of Buyers- ability of buyers to force prices down, bargain for higher quality, play competitors against each other
Large purchases
Backward integration
Alternative suppliers
Low cost to change suppliers
Product is unimportant to buyer

8.
Bargaining Power of Suppliers- ability of suppliers to raise prices or reduce quality
Industry is dominated by a few companies
Unique product or service
Substitutes are not readily available
Ability to forward integrate