PORTERS FIVE FORCES

Threat of new
entrants
Bargaining
power of
suppliers

Industry
Rivalry

Threat of
substitutes

Bargaining
power
of buyers

Threat of new entrants

Economies of Scale

Product Differentiation

Switching costs

Capital Requirements

Cost advantages Independent of Size

Access to Distribution Channels

Government Policy

Likely retaliation

Threat of substitute products

Relative price and performance of

substitutes (depends on what
performance the customer wants)

Switching costs

Buyer propensity to substitute

Bargaining power of suppliers

Differentiation (uniqueness) of inputs

Are there substitute inputs?

Switching costs is the purchaser locked in?

Concentration of suppliers vs concentration of

industry

How important is this volume to the supplier?

The cost of these supplies compared to total

industry purchases

Decision makers incentives to purchase

Threat of forward integration

Bargaining power of buyers

This is the mirror image of suppliers bargaining power.

Differentiation (uniqueness) of outputs being offered

Are there substitutes available?

Switching costs is the buyer locked in?

Concentration of buyers vs concentration of industry

How important is this volume to the buyer?

The cost of these supplies compared to total buyer
purchases
Decision makers incentives to purchase
Threat of backward integration

Industry Rivalry

Number of Competitors
Industry Growth rate

Differentiation of Products

Switching Costs

High Fixed Costs means high rivalry

Barriers to exit

Diversity of Competitors

Corporate stakes

Intermittent over capacity

EXTERNAL
ENVIRONMENT

Political Legal

Labour Law & Regulation of employment

Food Act
Food regulation
Products tariffs
Services government imposed
restrictions
Consumer protection
Zoning, licensing, operating hours (trade
restrictiveness imposed)
Foreign equity restrictions (Telco)

The Malaysian governments

implementation of the
minimum wage policy
effective January 2014 has
effected many operators in
the service
industry..(Source)