Analyzing the Competition

Five Forces Model (Porter)

Industry Rivalry

• Number of competitors
• Rate of industry growth
• Intermittent industry overcapacity
• Exit barriers
• Informational complexity
• Brand equity
• Level of advertising expense
• Diversity of competitors

Threat to New Entry

• Barriers to entry
• Economies of scales
• Brand equity
• Switching cost
• Access to distribution
• Absolute cost advantages
• Learning curve advantages
• Government policies

Supplier Power

• Switching costs of suppliers
• Degree of differentiation of inputs
• Price of inputs
• Uninterrupted supplies of input

Buyer Power

• Bargaining leverage and volume
• Buyer switching cost
• Buyer information availability
• Buyer propensity to substitute