Presented By Rahul Kalra

Michael Porter developed Five Forces model to analyze the

economic and market forces that will ultimately influence an
industry’s profit potential.
Those Five Forces are

•Threat of New entrants

•Bargaining power of Suppliers
•Bargaining Power of Buyers
•Threat of Substitute products or services
•Degree of Rivalry among existing competitors
 Overal
Threat of new entrants is l
influenced by
Factors Tata NANO Threat of new
Rating:
Entry Deterring Price
Advantages
Yes, The Price is Rs
entrants
Low
LOW
130,000.
Retaliation by TATA Yes, because of large Low
in case of competition resources.
High Entry Costs Yes,TATA spent Rs Medium because of
17oo* crore as initial reverse engineering
investment + 4 years process and
on research availability of
resources.
Experience HIGH because of its Low
parent
experience(TATA
Motor)
Other Cost Yes** Low
advantages
 Overal
Bargaining Power of Buyers is l
influenced by Rating:
Factors Tata NANO Buyer Power
Advantages LOW
Differentiation Price , Durability , Low
Brand equity

Concentration Large number of Low

consumers

Profitability Easy Availability of Low

loans
Quality •Car has passed the Low
full frontal crash and
side impact crash
•Passed Govt. Test
of emission,noise
and vibration
 Overal
Bargaining Power of l
Suppliers is influenced by Rating:
Factors Supplier Power
LOW
Concentration High Low

Switching Costs Low Low

Organization/cartel No Low

Diversification of No Low
supplier products
Threat of Substitute product is
influenced by Overall
Factors Threat of
substitute Rating
Availability Same category -NO low
Low
Other Category Yes, but, minimal Medium
substitutes extent e,g. High end
bikes and other car
models like
Reva,Alto
Time Lag in High Low
availability of same
category product
Quality of substitute Quality influences Low in short term
the customer.
Rivalry among Existing Overall
competitors is influenced by Rating
Factors Rivalry among
existing Mediu
competitors
Brand Image Brand equity Low among same m
influences the category
customer
No.of Competitos Negligible in short low
term

Size of payoff Depends on Low

Volume
Switching costs Medium as Medium
customers can
switch to other
products
Origin of Diverse High
competitors