Porter's five forces

Threat of Bargaining power

new entrants of suppliers

Porter's five
forces

Threat of Bargaining power

substitutes of customers

Competitive
rivalry
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 Porter's five forces with explanation

Threat of Threat of Bargaining Bargaining Competitive

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

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 Potential factors of forces
Threat of new entrants Threat of substitutes
 The existence of barriers to  Buyer propensity to
entry substitute
 Cost disadvantages  Buyer's switching costs
independent of size  Number of substitute
 Economies of scale products available in the
 Product differentiation market
 Brand equity  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 Bargaining power of
suppliers customers
 Supplier switching costs  Buyer switching costs
relative to firm switching  Buyer information availability
costs  Availability of existing
 Degree of differentiation of substitute products
inputs  Buyer price sensitivity
 Impact of inputs on cost and
differentiation

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