Porters Five Forces

Define Porters 5 Forces
A tool to determine the ability of the business to influence the market and therefore profitability of a given industry
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What are Porters Five Forces?
Barriers to Entry/ Level of Competition/ Threat of Substitutes/Buyer Power/ Supplier Power
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What does it mean for businesses if there are low barriers to entry?
Future competition is likely to greater and will restrict the firms ability to influence the market.
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What does it mean for a business if there are high barriers to entry?
They will struggle or cannot enter the market
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What is Porters point of view with Competitive Rivalry?
This is the main fore that affects the businesses ability to influence the market.
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What does it mean if there are a high number of competitors in the business?
A business will less likely to have influence.
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What will happen if a business is able to differentiate their products?
More influence.
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What does the threat of substitute products depend upon?
The ability to differentiate products. If they can differentiate products then they will decrease the threat of competition.
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Identify some of the factors that affect the power customers have?
No. of Customers (less = more power)/ Importance or amount of purchases (More=Power)/ Ability to switch products
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In what way do suppliers have power over businesses?
They can increase the costs to a business and decrease the extent to which it can control its operations.
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How is a business affected if there is a limited amount of suppliers?
They cannot switch suppliers as easily and the suppliers have the power to supply less or more.
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Other cards in this set

Card 2

Front

What are Porters Five Forces?

Back

Barriers to Entry/ Level of Competition/ Threat of Substitutes/Buyer Power/ Supplier Power

Card 3

Front

What does it mean for businesses if there are low barriers to entry?

Back

Preview of the front of card 3

Card 4

Front

What does it mean for a business if there are high barriers to entry?

Back

Preview of the front of card 4

Card 5

Front

What is Porters point of view with Competitive Rivalry?

Back

Preview of the front of card 5
View more cards

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