threats to your business by these factors i.e suppliers, buyes, subsitutes, potential entries (new entrants in the firm)

1. Competative structure of
industries
Porter’s five factors model
(Michael E Porter)

3. Components of the model
1) Threat of new entrants
2) Threats of subsitutes
3) Bargaining powers of suppliers
4) Bargaining powers of buyers

4. Threats of the subsitutes when
1) If the subsitute is cheaper than inustries product
2) If the attributes , performance and fuctions of the subsitute is
superior
3) Quality of the subsitute is superior

5. Suppliers find them in a powerful situation when
•There are only a few large suppliers
•The resource they supply is scarce
•The cost of switching to an alternative supplier is high
•The product is easy to distinguish and loyal customers are reluctant to
switch
•The supplier can threaten to integrate vertically
•The customer is small and unimportant
•There are no or few substitute resources available

6. Customers tend to enjoy strong bargaining power when
•There are only a few of them
•The customer purchases a significant proportion of output of an industry
•They possess a credible backward integration threat – that is they threaten
to buy the producing firm or its rivals
•They can choose from a wide range of supply firms
•They find it easy and inexpensive to switch to alternative suppliers

7. Any queries?????? ;-)