Porter's Five Forces

Porter's Five Forces

  • Submitted By: Gayashan
  • Date Submitted: 08/09/2009 8:48 AM
  • Category: Business
  • Words: 435
  • Page: 2
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Porter’s “five forces” model of industry competition is used to inspect a competitive environment and establish a firm’s possible profits. The model uses five competitive forces that determine a particular firm’s capability to compete. The chocolate industry can use the “five forces” model as an analytical tool to determine the competitive market. The five competitive forces used in the model are threat of new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitute products, and intensity of rivalry among competitors.
The final competitive force of Porter’s “five forces” model is the intensity of rivalry among competitors in an industry. This competitive force can create price wars, advertising battles, new product lines, and higher quality of customer service. There are six circumstances that intensify rivalry: many balanced competitors, a slow growing industry, high fixed or storage costs, undifferentiated products or no switching costs, large increments of capacity, and high exit barriers .


Sort Desciption: To identify the important. structural features of your industry via the five forces you. conduct an industry analysis that answers the question ...

Content Inside: PURDUE EXTENSION EC-722 Industry Analysis: The Five Forces Cole Ehmke Joan Fulton and Jay Akridge Department of Agricultural Economics Kathleen Erickson Erickson Communications Sally Linton Department of Food Science Overview Assessing Your Marketplace The economic structure of an industry is not an accident. Its complexities are the result of long-term social trends and economic forces. But its effects on you as a business manager are immediate because it determines the competitive rules and strategies you are likely to use. Learning about that structure will provide essential insight for your business strategy. MichaelPorterhasidentifiedfiveforcesthatar ewidelyusedto assess the...

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