MICHAEL PORTER’S FIVE

FORCE INDUSTRY ANALYSIS

GROUP 3
KARAN ESHA BHARGAV ROSHINI AND
CHRISTOPHER
W H O WA S
MICHAEL
P O RT E R ?
THE FIVE FORCES
MODEL
 COMPETITIVE RIVALRY

IDENTIFICATION MARKET MARKET SHARE MERGERS AND

OF COMPETITORS COMPARISON AND BRAND ACQUISITIONS
EQUITY
FACTORS AFFECTING COMPETITIVE RIVALRY

MARKET SLOW MARKET

PRICE
SATURATION GROWTH

PRODUCT/ SERVICE SUPPLY AND

ADVERTISING
DIFFERENTIATION DEMAND
 SUPPLIER POWER

POTENTIAL SUPPLIERS

RELIANCE ON SUPPLIERS

SWITCHING COSTS
BUYER POWER
NUMBER OF BUYERS

BARGAINING LEVERAGE

PRICE SENSITIVITY

SWITCHING COSTS
 THREAT OF SUBSTITUTION

AVAILABILITY COST QUALITY PERFORMANCE

 THREAT OF NEW ENTRY
CAPITAL INVESTMENT

TECHNOLOGY

LEGAL BARRIERS

MARKET LEADERSHIP
 THE INDUSTRY ANALYSIS FRAMEWORK

Is rivalry between competitors intense or do you tend to retain customers relatively

easily?
Do you have lots of suppliers to choose from or do you rely heavily on a small
group of suppliers?
Is buyer power high or low?

Would buyers find it easy to substitute your product or service?

Do new competitors find it easy to enter the market or is it difficult?

 FIVE FORCES ON APPLE
Co

Competitive
Rivalry
High
Direct competitors with large
resources and similar products
and target markets

Threat of New Entry Buyer Power Supplier Power Substitutes

Low to Moderate
High capital requirements for
brand development and
competition with established
brands
Moderate to High
Brand loyalty, low switching costs,
ease of information
Low Low
No closed substitutes, open
Vast number of suppliers and substitutes differ in performance and
availability of materails
quality
 CRITICISMS OF THE MODEL

EVOLUTION OF CIRCUMSTANCES SURROUNDING THE MODEL

EXTERNAL FOCUS

ABSTRACT AND RIGID

BLIND SPOTS

EQUAL WEIGHTAGE OF FORCES

FIVE FORCES RECAP WITH
NETFLIX

https://www.youtube.com/watch?v=OWwSS6nrfQM
Q&A
THANK YOU