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Five Forces Model: Michael Porter's

The document analyzes the fast-moving consumer goods (FMCG) industry using Porter's Five Forces model. It finds high rivalry among competitors, moderate threat of substitutes, moderate barriers to entry, moderate bargaining power of suppliers, and moderate power of buyers. Overall, it assesses the industry as having high volume and low margins, high competition, and effective substitution effects.

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Tarsh Kumar Raut
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91 views2 pages

Five Forces Model: Michael Porter's

The document analyzes the fast-moving consumer goods (FMCG) industry using Porter's Five Forces model. It finds high rivalry among competitors, moderate threat of substitutes, moderate barriers to entry, moderate bargaining power of suppliers, and moderate power of buyers. Overall, it assesses the industry as having high volume and low margins, high competition, and effective substitution effects.

Uploaded by

Tarsh Kumar Raut
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Threat of substitutes (1.

6/5)
•
Michael Porter’s •
High availability of close substitutes.--
Low consumer switching cost.-
•
Five Forces Model •
Relative price & performance of substitutes.=
Profitability of substitutes.-

Bargaining power of suppliers


Barriers to entry (3.4/5)
•
Rivalry among competitors (3.8/5) (2.8/5)
Attractive economies of scale.+
• Number of market players.++ • Number of suppliers.+
• Product differentiation via shape, size,
• High industry growth.+ • Availability of substitute.+
color, quantity etc.=
• Low switching cost from one company to • Supplier's threat of forward
• High brand identity.=
another.- integration.- -
• High capital investment.-
• Moderate product differentiation.= • Industry’s threat of backward
• Huge availability of distribution channels.+
• High intensity of competitive rivalry.++ integration.-
+
• Industry’s dependency on suppliers.=

Power of buyers (3.2/5)


• High no. of buyers.=
• Buyer’s switching cost and aggressive
marketing strategies.+
• Availability of substitutes for the industry’s
Colour codes products.++
<2.5 • Backward integration of buyer.-
2.5-3.5 • Bulk purchase of products.- Symbols and Weightage:
3.5> (++) : 5 | (+) : 4 | (=) : 3 | (-) : 2 | (--) : 1
Overall Assessment

• High volume & Low margin industry.


• High competition and effective substitution
effect.
• Highly admirable sector in Indian economy.
FMCG Industry
• FDI and other future trends

Overall Assessment
6
5
5
4.5
3.8
4 4
3.4
3.2
3.5 3
2.8
3
2
2.5

2 1.6 1

1.5 0
Threat of new Rivalry among Power of Power of Threat of Overall
1
entrants competitores substitutes Attractiveness
0.5 buyers suppliers
FMCG Industry Overall
0 assessment
Rivalry Among Threat of Barriers to Entry Bargaining power Power of Buyers
Competitiors Substitutes of suppliers

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