PORTER'S 5 FORCES

Use this sample example of Porter's 5 Forces to analyze competitive environment of your business and develop strategies by analyzing f
to competitors' rivalry, customer bargaining power, suppliers, incoming threats from new competitors and substitutes.
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THREAT OF NEW ENTRY

COMPETITIVE
RIVALRY
 SUPPLIER POWER COMPETITIVE BUYER POW
RIVALRY

THREAT OF
SUBSTITUTION

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 s and develop strategies by analyzing factors related
titors and substitutes.
 BUYER POWER

egic vision:
 PORTER'S 5 FORCES ANALYSIS

THREAT OF NEW ENTRANTS

Evaluation of how the entry of new competitors in the market can influence the organization in relation to:

- Access to distribution channels and raw materials.

- Use and technological adaptations.
- Know How and patents.
- Brand image and product / service differentiation.
- Investment needs and adaptation costs.
- Regulatory requirements for new entrants.
 PORTER'S 5 FORCES ANALYSIS

BARGAINING POWER OF SUPPLIERS

Evaluation of the bargaining power of suppliers for the following aspects:

- Degree of dependence of the supplier or in relation to the exclusivity in the supply.

- Inherent costs of change of supplier.
- Quantity of suppliers that meet the requirements.
- Degree of flexibility in the negotiation of payment terms.
- Degree of vendor prioritization for order processing in case of product shortage or inventory reduction.
- Regularity of delivery times.
 PORTER'S 5 FORCES ANALYSIS

BARGAINING POWER OF BUYERS

Evaluation of the influence of customers in relation to aspects:

- Perception of product quality in relation to possible substitutes or competitors.

- Price strategy in comparison to other alternatives offered by the market.
- Requirements regarding flexibility of payment and delivery deadlines.
- Relative costs for companies to change customers VS costs for customers to switch products.
- Degree of differentiation and brand of the product perceived by the client in relation to the competitors.
 PORTER'S 5 FORCES ANALYSIS

THREAT OF SUBSTITUTES

Evaluation of the possibilities and trends of substitution of the product or service:

- Assess the risk of substitution of the product or service and estimated time frame for this.
- Measure the costs of changing factors of production, development and technologies to carry out the substitution.
- Perception of customers' willingness to research, evaluate and purchase substitute products.
- Projection of the product or service life cycle and adaptations according to the real demand and market dynamics.
 PORTER'S 5 FORCES ANALYSIS

INDUSTRY RIVALRY

Direct evaluation of influence among competitors:

- Evaluate market share VS annual growth rates VS industry growth.

- Comparison of fixed costs VS variables and simulation of possible changes of growth and adequacy to variation of demand.
- Differentiation of product / service from competitors.
- Exit barriers in relation to legal, social, strategic relations and costs.
- Evaluate the quantity VS diversity VS degree of influence of competitors.
- Funding power and potential of competitors for investments in innovation and efficiency.
PORTER'S 5 FORCES ANALYSIS SUM

THREAT OF NEW ENTRANTS

- Access to distribution channels and raw materials.

- Use and technological adaptations.

- Know How and patents.
- Brand image and product / service differentiation.

- Investment needs and adaptation costs.

- Regulatory requirements for new entrants.


BARGAINING POWER OF SUPPLIERS
- Degree of dependence of the supplier or in relation to the
exclusivity in the supply.
- Inherent costs of change of supplier.
- Quantity of suppliers that meet the requirements.
- Degree of flexibility in the negotiation of payment terms.
- Degree of vendor prioritization for order processing in case of
product shortage or inventory reduction.
- Regularity of delivery times.
INDUSTRY RIVALRY
- Evaluate market share VS annual growth rates VS industr
- Comparison of fixed costs VS variables and simulation of
changes of growth and adequacy to variation of demand.
- Differentiation of product / service from competitors.
- Exit barriers in relation to legal, social, strategic relations
- Evaluate the quantity VS diversity VS degree of influence
competitors.
- Funding power and potential of competitors for investme
innovation and efficiency.
 THREAT OF SUBSTITUTES

- Assess the risk of substitution of the product or service a

estimated time frame for this.
- Measure the costs of changing factors of production, dev
and technologies to carry out the substitution.
- Perception of customers' willingness to research, evaluat
purchase substitute products.

- Projection of the product or service life cycle and adapta

according to the real demand and market dynamics.
ES ANALYSIS SUMMARY

THREAT OF NEW ENTRANTS

stribution channels and raw materials.

hnological adaptations.
and patents.
e and product / service differentiation.

needs and adaptation costs.

equirements for new entrants.

 INDUSTRY RIVALRY
arket share VS annual growth rates VS industry growth.
n of fixed costs VS variables and simulation of possible
rowth and adequacy to variation of demand.
on of product / service from competitors.
s in relation to legal, social, strategic relations and costs.
e quantity VS diversity VS degree of influence of
wer and potential of competitors for investments in
nd efficiency.
BARGAINING POWER OF BUYERS
- Perception of product quality in relation to possible substitutes or
competitors.
- Price strategy in comparison to other alternatives offered by the
market.
- Requirements regarding flexibility of payment and delivery
deadlines.
- Relative costs for companies to change customers VS costs for
customers to switch products.
- Degree of differentiation and brand of the product perceived by the
client in relation to the competitors.
 THREAT OF SUBSTITUTES

isk of substitution of the product or service and

me frame for this.
e costs of changing factors of production, development
gies to carry out the substitution.
of customers' willingness to research, evaluate and
stitute products.

of the product or service life cycle and adaptations

the real demand and market dynamics.
utes or

by the

for

ed by the