Porter's five forces

Threat of Bargaining power

new entrants of suppliers

Porter's five
forces

Threat of Bargaining power

substitutes of customers

Competitive
rivalry
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Porter's five forces with explanation

Threat of Threat of Bargaining Bargaining Competitive

new entrants substitutes power of power of rivalry
customers suppliers

 Profitable  A substitute  The market  The market inputs.  For most

industries that product uses a outputs. The Suppliers of raw industries the
yield high returns different ability of materials, intensity of
components,
will attract new technology to try customers to put competitive
labor, and
firms. New to solve the same the firm under services (such as rivalry is the
entrants economic need. pressure, which expertise) to the major
eventually will also affects the firm can be a determinant of
decrease customer's source of power the
profitability for sensitivity to price over the firm competitiveness
other firms in the changes. when there are of the industry.
few substitutes.
industry.

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 Potential factors of forces
Threat of new entrants
 The existence of barriers to
entry
 Cost disadvantages
independent of size
 Economies of scale
 Product differentiation
 Brand equity
Bargaining power of
suppliers
Supplier switching costs
 
relative to firm switching
costs
 Degree of differentiation of
inputs
 Impact of inputs on cost and
differentiation
Threat of substitutes
 Buyer propensity to
substitute
 Buyer's switching costs
 Number of substitute
products available in the
Competitive rivalry market
 Ease of substitution
 Sustainable competitive
advantage through
innovation
 Competition between online
and offline companies
Bargaining power of
 Level of advertising expense customers
 Firm concentration ratio
Buyer switching costs
 Buyer information
availability
 Availability of existing
substitute products
 Buyer price sensitivity
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