Porter’s Five Forces of Industry Attractiveness
• Number of competitors, and
their relative size and power
• Growth rate of the industry
• Quantum of CAPEX
• Capacity augmentation in
large/continuous increments
• Commodity vs differentiated
products/services
• Exit Barriers
• Economies of Scale (Barrier to
entry)
• Capital Requirement (BTE)
• Product Differentiation (BTE)
• Access to Distribution Channels
(BTE)
• Expected Retaliation
• Concentration as compared to the industry
it sells to
• Absence of substitutes to contend with, to
sell to the industry
• The industry is insignificant (viz., not an
important customer) for the supplier group
• Supplier products having high switching
costs
• Supplier’s threat of possible forward
integration
• Relative price performance
of substitutes
• Buyer switching costs