MICHAEL PORTER’S FIVE FORCE MODEL<br />
About Michael Porter<br /><ul><li>B.S.E. with high honors in aerospace and mechanical engineering
M.B.A. with high distinction  from the Harvard Business School and Ph.D. in Business Economics from Harvard University
Author of 18 books and numerous articles (Competitive Strategy, Competitive Advantage, Competitive Advantage of Nations, a...
Six-time winner of the McKinsey Award for the best Harvard Business Review article of the year
Bishop William Lawrence University Professor at Harvard Business School</li></ul>Born: 1947 (age 62–63)<br />Occupation: A...
…contd<br /><ul><li>Leading authority on company strategy and the competitiveness of nations and regions. Michael Porter’s...
An advisor to business, government, and the social sector. He has served as strategy advisor to numerous leading U.S. and ...
Serves on two public boards of directors
Plays an active role in U.S. economic policy and has led national economic strategy programs in numerous countries
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Michael porter

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Michael porter

  1. 1. MICHAEL PORTER’S FIVE FORCE MODEL<br />
  2. 2. About Michael Porter<br /><ul><li>B.S.E. with high honors in aerospace and mechanical engineering
  3. 3. M.B.A. with high distinction from the Harvard Business School and Ph.D. in Business Economics from Harvard University
  4. 4. Author of 18 books and numerous articles (Competitive Strategy, Competitive Advantage, Competitive Advantage of Nations, and On Competition)
  5. 5. Six-time winner of the McKinsey Award for the best Harvard Business Review article of the year
  6. 6. Bishop William Lawrence University Professor at Harvard Business School</li></ul>Born: 1947 (age 62–63)<br />Occupation: Author, Management Consultant<br />
  7. 7. …contd<br /><ul><li>Leading authority on company strategy and the competitiveness of nations and regions. Michael Porter’s work is recognized in many governments, corporations and academic circles globally.
  8. 8. An advisor to business, government, and the social sector. He has served as strategy advisor to numerous leading U.S. and international companies
  9. 9. Serves on two public boards of directors
  10. 10. Plays an active role in U.S. economic policy and has led national economic strategy programs in numerous countries
  11. 11. Currently working with the Presidents of Rwanda and South Korea
  12. 12. founded three major non-profit organization</li></li></ul><li>Porter’s five forces<br /><ul><li>“How Competitive Forces Shape Strategy” – first Harvard Business Review article and it started a revolution in the strategy field
  13. 13. It is a framework for the industry analysis and business strategy development
  14. 14. Industry as being influenced by five forces
  15. 15. Forces determine the competitive intensity and therefore attractiveness of a market (Attractiveness in this context refers to the overall industry profitability)
  16. 16. The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates</li></li></ul><li>The Five Forces That Shape Industry Competition<br />
  17. 17. RIVALRY AMONG EXISTING COMPETITORS<br />Exit barriers<br />Industry concentration<br />Fixed Costs<br />Industry Growth<br />Product differences<br />Switching costs<br />Brand Identity<br />Diversity of rivals<br />
  18. 18. BARRIERS TO ENTRY<br />Government policy<br />Patents and proprietary knowledge serve to restrict entry into an industry<br />Asset specificity inhibits entry into an industry<br />Economies of scale (MES)<br />Access to distribution channels<br />Access to distribution inputs<br />
  19. 19. SUBSTITUTE PRODUCTS OR SERVICES<br />Buyer inclination to substitute<br />Switching cost<br />Price performance trade-off of substitutes<br />
  20. 20. BUYER POWER<br />Bargaining leverage<br />Buyer Volume<br />Buyer information<br />Brand identity<br />Price sensitivity<br />Threat of backward integration<br />Product differentiation<br />Substitutes available<br />Buyers’ incentives<br />
  21. 21. SUPPLIER POWER<br />Supplier concentration<br />Importance of volume to supplier<br />Differentiation of inputs<br />Switching costs of firms in the industry<br />Threat of forward integration<br />Impact of inputs on cost or differentiation<br />
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