Al Zamel 1 - Five Forces Analysis

Al Zamel 1 - Five Forces Analysis

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Intensity of Existing Rivalry

Government limits competition (Al Zamel 1) Government policies and regulations can dictate the level of competition within the industry. When...
Fast industry growth rate (Al Zamel 1) When industries are growing revenue quickly, they are less likely to compete, because the total...
Exit barriers are low (Al Zamel 1) When exit barriers are low, weak firms are more likely to leave the market, which will increase the...

Bargaining Power of Suppliers

Low concentration of suppliers (Al Zamel 1) A low concentration of suppliers means there are many suppliers with limited bargaining power. Low...
Inputs have little impact on costs (Al Zamel 1) When inputs are not a big component of costs, suppliers of those inputs have less bargaining power....
Low cost of switching suppliers (Al Zamel 1) The easier it is to switch suppliers, the less bargaining power they have. Low supplier switching...

Threat of Substitutes

Substitute product is inferior (Al Zamel 1) An inferior product means a customer is less likely to switch from Al Zamel 1 to another product or...
Substitute has lower performance (Al Zamel 1) A lower performance product means a customer is less likely to switch from Al Zamel 1 to another...
Substantial product differentiation (Al Zamel 1) When products and services are very different, customers are less likely to find comparable product...
Limited number of substitutes (Al Zamel 1) A limited number of substitutes mean that customers cannot easily find other products or services...

Bargaining Power of Customers

Buyers require special customization (Al Zamel 1) When customers require special customizations, they are less likely to switch to producers who have...
Limited buyer information availability (Al Zamel 1) When buyers have limited information, they are at a disadvantage in negotiations with sellers....
Low dependency on distributors (Al Zamel 1) When produces have low dependence, distributors have less bargaining power. Low dependency...
Large number of customers (Al Zamel 1) When there are large numbers of customers, no one customer tends to have bargaining leverage....

Threat of New Competitors

High sunk costs limit competition (Al Zamel 1) High sunk costs make it difficult for a competitor to enter a new market, because they have to...
Entry barriers are high (Al Zamel 1) When barriers are high, it is more difficult for new competitors to enter the market. High entry...
Strong brand names are important (Al Zamel 1) If strong brands are critical to compete, then new competitors will have to improve their brand...
Patents limit new competition (Al Zamel 1) Patents that cover vital technologies make it difficult for new competitors, because the best...
Customers are loyal to existing brands (Al Zamel 1) 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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