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    Porter's 5 Forces

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    Rahul
    Porter's 5 Forces is a framework for industry analysis and business strategy development. It analyzes five competitive forces that determine the profitability of an industry: the threat of substitute products or services, the threat of established rivals, the threat of new entrants, the bargaining power of suppliers, and the bargaining power of customers. Understanding these forces can help businesses determine where their power or weakness lies and identify opportunities for improvement.

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    Porter's 5 Forces

    Uploaded by

    Rahul
    17 views11 pages
    Porter's 5 Forces is a framework for industry analysis and business strategy development. It analyzes five competitive forces that determine the profitability of an industry: the threat of substitute products or services, the threat of established rivals, the threat of new entrants, the bargaining power of suppliers, and the bargaining power of customers. Understanding these forces can help businesses determine where their power or weakness lies and identify opportunities for improvement.

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    Porter’s 5 Forces

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    Porter's 5 Forces is a framework for industry analysis and business strategy development. It analyzes five competitive forces that determine the profitability of an industry: the threat of substitute products or services, the threat of established rivals, the threat of new entrants, the bargaining power of suppliers, and the bargaining power of customers. Understanding these forces can help businesses determine where their power or weakness lies and identify opportunities for improvement.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    17 views11 pages

    Porter's 5 Forces

    Uploaded by

    Rahul
    Porter's 5 Forces is a framework for industry analysis and business strategy development. It analyzes five competitive forces that determine the profitability of an industry: the threat of substitute products or services, the threat of established rivals, the threat of new entrants, the bargaining power of suppliers, and the bargaining power of customers. Understanding these forces can help businesses determine where their power or weakness lies and identify opportunities for improvement.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 11

    Porter’s 5

    forces
    Title
    Introduction
    Five forces
    Conclusion
    Introduction
     Harvard Business School professor Michael Porter created the tool.
    Since its publication in 1979, it has become one of the most popular
    and highly regarded business strategy tools.

     According to Porter, five forces represent an industry's key sources of


    competitive pressure. They are:
    1. Competitive Rivalry.
    2. Supplier Power.
    3. Buyer Power.
    4. Threat of Substitution.
    5. Threat of New Entry.

    let’s understand the five forces with an example of a supermarket


    business.
    Competitive Rivalry
    The first of Porter's Five Forces looks at the number and strength of
    your competitors. Consider how many rivals the business has, who they
    are, and how the quality of their product compares with ours.

    • High Number of Competitors

    • Location and Size of Stores

    • Customer Loyalty Programs

    • Innovation and Differentiation


    Supplier Power
    Suppliers gain power if they can increase their prices quickly or reduce
    the quality of their products. If your suppliers are the only ones who
    can supply a particular service, they have considerable supplier power.
    Even if businesses can switch suppliers, business must consider how
    expensive it would be.

    • National Brands

    • Private Label Products

    • Supplier Concentration
    Buyer’s power
    If the number of buyers is low compared to the number of suppliers in an
    industry, then they have what's known as "buyer power." This means they
    may find it easy to switch to new, cheaper competitors, which can
    ultimately drive down prices.

    • Plenty of Alternatives

    • Price Sensitivity

    • Informed Consumers

    • Low Switching Costs


    Threat of substitution
    This refers to the likelihood of your customers finding a different way
    of doing what business do. It could be cheaper, or better, or both. The
    threat of substitution rises when customers find it easy to switch to
    another product, or when a new and desirable product enters the market
    unexpectedly.

    • Limited Substitutes for Core Products

    • Shifting Consumer Preferences

    • Convenience and Price of Substitutes


    Threat of new entry
    Potential rival’s ability to enter your market can affect a business's
    position. If it takes little money and effort to enter your market and
    compete effectively, or if the company needs more protection for its key
    technologies, then rivals can quickly enter your market and weaken your
    position.

    • High Barriers to Entry

    • Established Brands

    • Economies of Scale
    Conclusion
     By understanding and applying Porter's Five Forces, a business can gain valuable
    insights into its competitive environment. This knowledge will empower the
    industry to develop effective strategies that ensure business thrives in the face of
    competition and changing market dynamics.
     We have to Remember, that it's a continuous process, so we have to keep analysing,
    adapting, and innovating to maintain a successful business.
     Sources
     https://www.mindtools.com/at7k8my/porter-s-five-forces
     https://bard.google.com/
     Prompts – Explain porter’s five forces in detail
    Thank business

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