V - Five Forces Analysis

V - Five Forces Analysis

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Short description of Porter's Five Forces analysis for…

Intensity of Existing Rivalry

Government limits competition (V) Government policies and regulations can dictate the level of competition within the industry. When...
Fast industry growth rate (V) When industries are growing revenue quickly, they are less likely to compete, because the total...
Relatively few competitors (V) Few competitors mean fewer firms are competing for the same customers and resources, which is a...

Bargaining Power of Suppliers

Low concentration of suppliers (V) A low concentration of suppliers means there are many suppliers with limited bargaining power. Low...

Threat of Substitutes

Substitute has lower performance (V) A lower performance product means a customer is less likely to switch from V to another product or...
Substitute is lower quality (V) A lower quality product means a customer is less likely to switch from V to another product or...
Substitute product is inferior (V) An inferior product means a customer is less likely to switch from V to another product or service.
Limited number of substitutes (V) A limited number of substitutes mean that customers cannot easily find other products or services...

Bargaining Power of Customers

Large number of customers (V) When there are large numbers of customers, no one customer tends to have bargaining leverage....
Product is important to customer (V) When customers cherish particular products they end up paying more for that one product. This...
Limited buyer choice (V) When customers have limited choices they end up paying more for the choices that are available....

Threat of New Competitors

Strong distribution network required (V) Weak distribution networks mean goods are more expensive to move around and some goods don’t get to...
High capital requirements (V) High capital requirements mean a company must spend a lot of money in order to compete in the...
Strong brand names are important (V) If strong brands are critical to compete, then new competitors will have to improve their brand...
Advanced technologies are required (V) Advanced technologies make it difficult for new competitors to enter the market because they have to...
Industry requires economies of scale (V) Economies of scale help producers to lower their cost by producing the next unit of output at lower...
Patents limit new competition (V) Patents that cover vital technologies make it difficult for new competitors, because the best...
Geographic factors limit competition (V) If existing competitors have the best geographical locations, new competitors will have a...
Customers are loyal to existing brands (V) It takes time and money to build a brand. When companies need to spend resources building a brand,...
High learning curve (V) When the learning curve is high, new competitors must spend time and money studying the market...
Entry barriers are high (V) When barriers are high, it is more difficult for new competitors to enter the market. High entry...

What is Porter's Five Forces Analysis?

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