Porters Five Forces

  • Created by: Howzat
  • Created on: 04-04-19 15:26

Porter's Five Forces

What are the FIVE FORCES?

  • Entry Threat (barriers to entry)
  • Buyer Power
  • Supplier Power
  • Rivalry- degree of and power of COMPETITORS
  • Substitute threat
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Porter's Five Forces

Horizontal competition looks at THREATS from COMPETITORS-

  • ENTRY THREAT- The LIKELIHOOD of a new business joining the industry.
  • THREAT OF SUBSTITUTE PRODUCTS- The likelihood of new products being introduced into the market. Are there barriers from stopping this from happening?
  • THE INTENSITY OF COMPETITIVE RIVALRY- How agressive is the competition? This depends on the amount/concentration of businesses in the market.

Vertical competition looks at threats from Suppliers and Customers-

  • THE BARGAINING POWER OF SUPPLIERS- What power do suppliers have over businesses that they supply to? For example- A supplier has a better deal somewhere else so it can ask for a better deal.
  • THE BARGAINING POWER OF CUSTOMERS- What power to customers have over businesses that they buy from?
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