ABC 19.08.18 - Five Forces Analysis

ABC 19.08.18 - Five Forces Analysis

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Intensity of Existing Rivalry

Exit barriers are low (ABC 19.08.18) When exit barriers are low, weak firms are more likely to leave the market, which will increase the...

Bargaining Power of Suppliers

Large number of substitute inputs (ABC 19.08.18) When there are a large number of substitute inputs, suppliers have less bargaining leverage over...
High competition among suppliers (ABC 19.08.18) High levels of competition among suppliers acts to reduce prices to producers. This is a positive...
Low cost of switching suppliers (ABC 19.08.18) The easier it is to switch suppliers, the less bargaining power they have. Low supplier switching...
Volume is critical to suppliers (ABC 19.08.18) When suppliers are reliant on high volumes, they have less bargaining power, because a producer can...
Diverse distribution channel (ABC 19.08.18) The more diverse distribution channels become the less bargaining power a single distributor will...

Threat of Substitutes

Substantial product differentiation (ABC 19.08.18) When products and services are very different, customers are less likely to find comparable product...
Limited number of substitutes (ABC 19.08.18) A limited number of substitutes mean that customers cannot easily find other products or services...

Bargaining Power of Customers

Large number of customers (ABC 19.08.18) When there are large numbers of customers, no one customer tends to have bargaining leverage....
Low buyer price sensitivity (ABC 19.08.18) When buyers are less sensitive to prices, prices can increase and buyers will still buy the product....
Product is important to customer (ABC 19.08.18) When customers cherish particular products they end up paying more for that one product. This...

Threat of New Competitors

High capital requirements (ABC 19.08.18) High capital requirements mean a company must spend a lot of money in order to compete in the...
Strong brand names are important (ABC 19.08.18) If strong brands are critical to compete, then new competitors will have to improve their brand...
Geographic factors limit competition (ABC 19.08.18) If existing competitors have the best geographical locations, new competitors will have a...
Advanced technologies are required (ABC 19.08.18) Advanced technologies make it difficult for new competitors to enter the market because they have to...
Customers are loyal to existing brands (ABC 19.08.18) It takes time and money to build a brand. When companies need to spend resources building a brand,...

What is Porter's Five Forces Analysis?

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