Tips and Tricks about my MBA experience

Strategy :: Porter :: 5 (+1) forces analysis




The Five Forces model of Porter is an outside-in business unit strategy tool that is used to make an analysis of the attractiveness (value…) of an industry structure. The Competitive Forces analysis is made by the identification of 5 fundamental competitive forces:

> the entry of competitors (how easy or difficult is it for new entrants to start to compete, which barriers do exist)
> the threat of substitutes (how easy can our product or service be substituted, especially cheaper) 
> the bargaining power of buyers (how strong is the position of buyers, can they work together to order large volumes) 
> the bargaining power of suppliers (how strong is the position of sellers, are there many or only few potential suppliers, is there a monopoly) 
> the rivalry among the existing players (is there a strong competition between the existing players, is one player very dominant or all all equal in strength/size)

> as a sixth factor could be added: government.




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