Porter s 5 Forces model porter

Porter’s 5 Forces

Power of buyers
• Buyer concentration- low
• Buyer switching costs relative to firm switching
costs - low
• Buyer information availability- high
• Availability of existing substitute products - high
• Buyer price sensitivity - high
• Differential advantage (uniqueness) of industry
products - moderate

Power of suppliers
• Supplier switching costs relative
to firm switching costs - moderate
• Presence of substitute - high
• Supplier concentration to firm concentration
ratio - moderate
• Employee solidarity - moderate
• Supplier competition - ability to forward
vertically integrate and cut out the BUYER - high

Threat of substitutes
• Buyer propensity to substitute - high
• Relative price performance of substitute moderate
• Buyer switching costs - low
• Perceived level of product differentiation - high
• Number of substitute products available in the
market- high
• Ease of substitution- high

Threat of new entrants
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Switching costs or sunk costs - moderate
Capital requirements - high

Access to distribution - high
Customer loyalty to established brands - high
Absolute cost - high
Industry profitability; the more profitable the
industry the more attractive it will be to new
competitors - moderate

Rivalry Among Competitors
• Sustainable competitive advantage through
innovation - moderate
• Level of advertising expense - high
• Firm concentration ratio - high