MR MICHAEL PORTER

INTRODUCTION
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PUBLICATION
STRUCTURAL ANALYSIS
Identifying the key structures of industries and
determine the strength of competitors forces and
hence profitability
Where it can best defend against these competitive
forces and also influence them in favor
It is mostly applies to diagnosing industry competition
in any country or international market , though some
of the institutional circumstances may differ.
FIVE FORCES OF STRUCTURAL ANALYSIS
STRUCTURAL DETERMINANTS
Entry of new entrants
Threats from substitutes
Bargaining power of buyers
Bargaining power of suppliers
Threat from existing competitors
MAJOR SOURCES OF ENTRY BARRIERS
Economies of scale
Product differentiation
Cost advantage
Capital requirements
Switching costs
Government policy
Access to distribution channels
OTHER DETERMINANTS OF ENTRANTS
Some other sources are a follows
Cost disadvantages
Expected retaliation
Entry deterring price
Property of entry barriers
Experience and scale as entry barriers
RIVALRY FROM EXISTING FIRMS
They can be characterized by some phrases like warlike bitter
or cut throat or polite or gentlemanly
Numerous or equally balanced competitors
Slow industry growth
High fixed or storage costs
Lack of differentiation and witching costs
Capacity augmented in large markets
Diverse competitors
High strategic stakes
High exit barriers
Shifting rivalry
EXIT BARRIERS AND ENTRY BARRIERS
PRESSURES FROM SUBSTITUTES PRODUCTS
Substitutes limit the potential returns of an industry
by placing a ceiling on prices that the firms can
profitably charge
Searching other products that cab perform same
functions as the products of industry
BARGAINING POWER OF THE BUYERS
A buyer group is powerful with the following
circumstances:
Concentrated or purchases large volume
Significant fraction of buyers costs
Few switching cost
Earns low profit
Buyers pose a credible threat of backward integration
Buyer has full information
BARGAINING POWER OF SUPPLIERS
The suppliers group is powerful with following
circumstances:
Dominated by few companies
Not obliged with other substitutes
Industry is not an important customer
Suppliers product is an important to industry
Suppliers group poses a credible threat of forward
integration
OTHER MAJOR FACTORS FOR COMPETITION

Government as a source in industry competition

Structural analysis and competitive strategy
Influencing balance
Exploiting change
Diversification strategy
CONCLUSION
This chapter has identifies a large number of factors
that can potentially have an impact on industry
competition. Not all of them will be important in any
one industry .therefore this framework can be rapidly
used in identifying the crucial structural features
determining the nature of competition in a particular
industry.SSS