Scribd
Upload
117 views16 pages

Poster's Five Forces

Porter's Five Forces is a model that identifies and analyzes five competitive forces that shape every industry: competition in the industry, potential of new entrants, power of suppliers, power of customers, and threat of substitute products. It is used to determine an industry's weaknesses and strengths and help establish corporate strategy. Each force is examined to determine how it affects a company's power and profitability within its industry.

Uploaded by

Ulysses Duran
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
117 views16 pages

Poster's Five Forces

Porter's Five Forces is a model that identifies and analyzes five competitive forces that shape every industry: competition in the industry, potential of new entrants, power of suppliers, power of customers, and threat of substitute products. It is used to determine an industry's weaknesses and strengths and help establish corporate strategy. Each force is examined to determine how it affects a company's power and profitability within its industry.

Uploaded by

Ulysses Duran
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
You are on page 1/ 16

PORTER'S FIVE

FORCES
WHAT ARE PORTER'S FIVE
FORCES?
• Porter's Five Forces is a model that identifies
and analyzes five competitive forces that
shape every industry and helps determine an
industry's weaknesses and strengths.
WHAT ARE PORTER'S FIVE
FORCES?
• It is frequently used to identify an industry's
structure to determine corporate strategy.
PORTER'S 5 FORCES ARE:
• Competition in the industry
• Potential of new entrants into the
industry
• Power of suppliers
• Power of customers
• Threat of substitute products
• COMPETITION IN THE INDUSTRY

• The first of the Five Forces refers to the


number of competitors and their ability to
undercut a company.
• COMPETITION IN THE INDUSTRY

• The larger the number of competitors,


along with the number of equivalent
products and services they offer, the
lesser the power of a company.
2. POTENTIAL OF NEW ENTRANTS INTO AN INDUSTRY

• A company's power is also affected by the


force of new entrants into its market.
2. POTENTIAL OF NEW ENTRANTS INTO AN INDUSTRY

• The less time and money it costs for a


competitor to enter a company's market
and be an effective competitor, the more an
established company's position could be
significantly weakened.
3. POWER OF SUPPLIERS

• This factor in the Porter model addresses


how easily suppliers can drive up the cost
of inputs.
3. POWER OF SUPPLIERS
• It is affected by the number of suppliers of
key inputs of a good or service, how
unique these inputs are, and how much it
would cost a company to switch to another
supplier.
3. POWER OF SUPPLIERS

• The fewer suppliers to an industry, the


more a company would depend on a
supplier.
4. POWER OF CUSTOMERS

• The ability that customers have to drive


prices lower or their level of power is one
of the Five Forces.
4. POWER OF CUSTOMERS
• It is affected by how many buyers or
customers a company has, how significant
each customer is, and how much it would
cost a company to find new customers or
markets for its output.
5. THREAT OF SUBSTITUTES

• Substitute goods or services that can be


used in place of a company's products or
services pose a threat.
5. THREAT OF SUBSTITUTES

• Companies that produce goods or


services for which there are no close
substitutes will have more power to
increase prices and lock in favorable
terms.

You might also like