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FIVE FORCES ANALYSIS MODEL
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- 1FIVE FORCES ANALYSIS MODELThis is an analysis scheme developed by Michael E Porter, a professor at Harvard Business School in the late 1970’s, to gauge the level of competition within a company’s industry. It assesses the current and potential lines of business and defines profitability expectations.
3 of the five forces relate to industry participants, and 2 relate to suppliers and customers. - 2Competitive rivalry (2)1. Intensity of competition in the industry
2. Size and quantity of other firms - 3Barrier to entry (7)1. Ease of entry into a market
2. Capital expenditure
3. Cost advantages
4. Brand loyalty to existing power brands
5. Size of market
6. Regulations
7. Economies of scale - 4Threat of substitute (1)1. Similar but different products fulfilling the same fundamental needs
- 5Buyer power (3)1. The buyer’s ability to exert control over price
2. The buyer’s ability to exert control over quality (complaints, returns, feedback)
3. Number of buyer’s - 6Supplier power (2)1. Ability to exert control over price (a lot of suppliers = price competition between suppliers)
2. Number of suppliers
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- Flashcards on FIVE FORCES ANALYSIS MODEL, created by jackieburns10 on 10/08/2015.
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