28-10-2016, 11:40 AM
1461985246-MARKETING......PresentationMMM.pptx (Size: 65.78 KB / Downloads: 4)
Introduction
The five forces model of analysis was developed by Michael porter to analysis the competitive environment in which a product or company works.
This model identifies and analysis 5 competitive forces that shape every industry, and helps determine an industry’s weaknesses and strengths.
Competition in the industry
Potential of new entrants into industry
Power of suppliers
Power of customers
Threat of substitute products
Impact on five forces:
Threat of intense segment rivalry impacts an industry. A segment is less attractive if it already strong, or aggressive competitors. Like A super shop shwapno’s competitor Mina Bazar.
Threat of New Entrants also influenced an industries success it was virtually impossible for new entrants to jump into the industry. A segment’s attractiveness varies with the height of its entry and exit barriers. Power is also affected by the ability of people to enter your market. If it costs little in time or money to enter your market and compete effectively, if there are few economies of scale in place, or if you have little protection for your key technologies, then new competitors can quickly enter your market and weaken your position.
Threat of substitutes occurs when companies within one industry are forced to compete with industries producing substitute products or services. Substitutes limit an industry’s potential returns by placing a ceiling on the prices that firms within that industry can charge to make a profit.
Power of buyer also influenced an industry. Buyers have bargaining power when they are strong enough to be able to put collective pressure on the companies producing a product or a service.
If supplier power more than business less attractive. When suppliers have bargaining power, they can apply pressure on a company by charging higher prices, adjusting the quality of the product or controlling availability and delivery timelines.