PORTER’S FIVE FORCES ANALYSIS

Threat of
New Entry

Rivalry
Bargaining among Bargaining
Power of Power of
Suppliers Existing Customer
Competitors

Threats of
Substitute

Threat of new entry:

 Economies of scale
 Proprietary product differences
 Brand identity
 Switching cost
 Capital requirements
 Access to distribution
 Absolute costs advantages
 Government policy
 Expected retaliation
Bargaining power of suppliers:
 Differentiation of inputs
 Switching costs
 Presence of substitute inputs
 Supplier concentration
 Importance of volume to supply
 Cost relative to total purchases
 Impact of inputs on cost or differentiation
 Threat of forward integration

Bargaining Power of Customer:

 Buyer concentration
 Buyer volume
 Buyer switching cost
 Buyer information
 Ability to integrate backward
 Substitute products
 Price/total purchases
 Product differences
 Brand identity
 Impact of quality/performance
 Buyer profits

Rivalry Among Existing Competitors

 Industry growth
 Fixed costs/value added
 Over capacity
 Product differentiation
 Brand identity
 Exhibits barriers
 Switching costs
  Concentration and balance
 Informational complexity
 Diversity of competitors
 Corporate stakes

Threats of Substitute
 Relative price performance of substitute
 Switching costs
 Buyer prosperity propensity to substitute