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    Porter Model

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    Zara Ammad
    Porter's Five Forces model is a framework for analyzing competition within an industry. It examines five competitive forces: the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitute products, and rivalry among existing competitors. Understanding these forces helps determine an industry's profitability and identify its strengths and weaknesses.

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    Porter Model

    Uploaded by

    Zara Ammad
    23 views7 pages
    Porter's Five Forces model is a framework for analyzing competition within an industry. It examines five competitive forces: the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitute products, and rivalry among existing competitors. Understanding these forces helps determine an industry's profitability and identify its strengths and weaknesses.

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    Porter's Five Forces model is a framework for analyzing competition within an industry. It examines five competitive forces: the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitute products, and rivalry among existing competitors. Understanding these forces helps determine an industry's profitability and identify its strengths and weaknesses.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    23 views7 pages

    Porter Model

    Uploaded by

    Zara Ammad
    Porter's Five Forces model is a framework for analyzing competition within an industry. It examines five competitive forces: the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitute products, and rivalry among existing competitors. Understanding these forces helps determine an industry's profitability and identify its strengths and weaknesses.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    of 7

    Porter 5 forces model

    • Porter’s Five Forces analysis is a framework that


    helps analyzing the level of competition within a
    certain industry. It is especially useful when
    starting a new business or when entering a new
    industry sector.
    Threat of new entrants

    • New entrants in an industry bring new capacity


    and the desire to gain market share. The
    seriousness of the threat depends on the barriers
    to enter a certain industry. The higher these
    barriers to entry, the smaller the threat for
    existing players. E.g Airline Industry
    • Economies of scale
    • Barriers to entry
    • Government policies
    Bargaining power of suppliers

    • This force analyzes how much power and control


    a company’s supplier (also known as the market
    of inputs) has over the potential to raise its
    prices or to reduce the quality of purchased
    goods or services, which in turn would lower an
    industry’s profitability potential. E.g. Airline
    Industry
    Bargaining power of buyers

    • The bargaining power of buyers is also described


    as the market of outputs. This force analyzes to
    what extent the customers are able to put the
    company under pressure, which also affects the
    customer’s sensitivity to price changes. The
    customers have a lot of power when there aren’t
    many of them and when the customers have
    many alternatives to buy from e.g Airline
    Industry
    Threat of substitute products

    • The existence of products outside of the realm of


    the common product boundaries increases the
    propensity of customers to switch to
    alternatives. In order to discover these
    alternatives one should look beyond similar
    products that are branded differently by
    competitors. Instead, every product that serves a
    similar need for customers should be taken into
    account. E.g Red bull/Coffee
    Rivalry among existing competitors
    • The last force of the Porter’s Five Forces
    examines how intense the current competition is
    in the marketplace, which is determined by the
    number of existing competitors and what each
    competitor is capable of doing. Rivalry is high
    when there are a lot of competitors that are
    roughly equal in size and power, when the
    industry is growing slowly and when consumers
    can easily switch to a competitors offering for
    little cost

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