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Cirque du Soleil: Porters Five Analysis Bargaining Power of Suppliers: Large number of substitute inputs- suppliers have less

s bargaining leverage over producers because there is competition among substitutes High competition among suppliers- competition reduces prices to producers which is positive for Cirque du Soleil Critical production inputs are similar- when inputs are similar, it is easier to mix and math inputs which reduces the amount of bargaining power a supplier has Volume is critical to suppliers- when suppliers such as Cirque de Soleil are reliant on high volumes, they have less bargaining power because the producer can threaten to cut the amount that they need, which affects the suppliers prots Low cost of switching suppliers- it is easy for Cirque de Soleil to switch suppliers Bargaining Power of Customers: Large number of customers- when there is a large number of customers, there is no one customer that has leverage to bargain (limited bargaining) Product is important to customer- customers are willing to pay for the product Limited buyer choice- customers have limited to choices when it comes to watching a production such as Cirque de Soleil Intensity of Existing Rivalry: Fast industry growth rate- when industries are growing revenue quickly, they are less likely to compete because the total industry is also growing Relatively few competitors- few competitors is a positive for Cirque de Soleil because they gain customers Low storage costs Threat of Substitutes: Substitute has lower performance- a lower performance from from other rms means people are more likely to choose Cirque de Soleil Substantial product differentiation- products and services are very different, therefore customers are less likely to nd comparable products that meet there needs Limited number of substitutes- a limited number of substitutes means that it is hard for customers to nd other products to sustain their needs Threat of New Competitors: Strong distribution network required- weak distribution networks means that goods are more expensive to move around. The expense of building a strong distribution network positively affects Cirque du Soleil High capital requirements- a company must spend a lot of money in order to compete in the market Advanced technologies- advanced technologies make it difcult for new competitors to enter the market because they have to develop new technology before effectively competing Geographic factors limit competition- new competitors are at a disadvantage due to the fact that Cirque du Soleil have the best geographical locations