Industry Analysis

Threat of Threat of Threat of Bargaining Competitive

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

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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
market
 Ease of substitution
Competitive rivalry
 Sustainable competitive
advantage through
innovation
 Competition between online
and offline companies
 Level of advertising expense
 Firm concentration ratio Bargaining power of
customers
 Buyer switching costs
 Buyer information availability
 Availability of existing
substitute products
 Buyer price sensitivity
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