Porter 5 Force Model

5 FORCE MODEL

Presented By:
Joel M Pais
MBA – 2011
Aloysius Institute of Management and Information Technology
(AIMIT)
 Overall
High Moderate Low
industry rating:
Threat of new
X
entrants.
Bargaining
power of X
buyers.
Threat of
X
substitutes.
Bargaining
power of X
suppliers.
Intensity of
rivalry among X
competitors.
 Threat of new entrants
• Threats of new entrants are towards lower side.
• The capital needed to build beer manufacturing
facilities and the costs associated with operating
business on a national scale are expensive.
• The cost associated with this highly controversial
industry seek high levels of sales, thus making the
industry more and more prohibitive for
newcomers.
• Government regulations are largest factor in this
force.
 Bargaining power of buyers
• Barraging power of buyers is high.
• The quantity of alcoholic beverages that a nation
consumes tends to be unaffected through
recession and prosperity while the quality of the
products purchased is directly related to the
disposable income.
• A decline in disposable income shifts consumers
preferences away from premium-priced brand-
name products in favour of lower-priced brands
i.e. switching cost is low.
 Threat of substitutes
• Threat of substitutes is low.
• Customer loyalty through brand awareness.
• The advertising restrictions placed on
alcoholic beverage industry in recent years
make it harder to achieve brand loyalty.
 Bargaining power of suppliers
• Suppliers’ power is low.
• Products used to brew beer are inexpensive
and suppliers are numerous.
• Intensity of rivalry among competitors
• Through the competition is tough, the
kingfisher brand is the one of the largest
supplier of beer, & the third largest
procedures of distilled spirits.