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Porter's 5 forces model
The document analyzes various industries using Porter's 5 Forces model. It discusses the threat of new entrants, threat of substitutes, power of suppliers, power of buyers, and rivalry among existing firms within the retailing, telecommunications, airline, pharmaceutical, automobile, and other industries. For each industry, it provides a brief analysis of the competitive forces and their impact on that industry.
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Porter's 5 forces model
- 1. PORTER’S 5 FORCES MODEL 1
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- 5. THREAT OF NEWENTRANTS THREAT OF SUBSTITUTES • Independent retailers decreased. • Deal with various products. • Chain stores • Chances of shifting is high. • Centralized buying competitive advantage POWER OF SUPPLIERS POWER OF BUYERS • Historically, exploit the relationship. • Lower bargaining power • Less power • High quality products – retailers’ honest RIVARLY AMONG EXISTING FIRMS WITHIN AN INDUSTRY • Cut throat Competition • Reduce – frequent fliers, memberships, loyalty cards, etc.. 5
- 6. TELECOMMUNICATION INDUSTRY 6
- 7. THREAT OF NEWENTRANTS THREAT OF SUBSTITUTES • Ownership of a telecom license • Cable TV – direct lines, broadband services • Finance POWER OF SUPPLIERS POWER OF BUYERS • Less power • Increased choice – high bargaining power • Talented managers & engineers • Switching costs – individual & large business customers. RIVARLY AMONG EXISTING FIRMS WITHIN AN INDUSTRY • Usage of phone, competition is high • Price • Value added services • Profitability low 7
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- 9. THREAT OF NEWENTRANTS THREAT OF SUBSTITUTES • Saturated Market • Time, Money • Brand Name & Recognition • Personal References & convenience POWER OF SUPPLIERS POWER OF BUYERS • Dominated – Boeing & Airbus • Low bargaining • Not much of difference. • Consider Service of airline too. RIVARLY AMONG EXISTING FIRMS WITHIN AN INDUSTRY • High competition • Cut throat competition • Low Profitability 9
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- 11. THREAT OF NEWENTRANTS THREATS OF SUBSTITUTES • Very low barriers to entry • No substitutes for the medicines • Government policies supportive • Biotechnology is a threat to synthetic pharma products • Entry price regulation exists • Economies of scale exist • Proprietary technology • Product existence POWER OF SUPPLIERS POWER OF BUYERS • Volume benefits occur • End consumers do not have bargaining power • Inputs standard, available locally • Brand identity exists but is in the hands of Influencer (Doctors) • Numerous suppliers-switching cost low • Price Sensitivity is less • Suppliers can go for forward integration • Highly fragmented market, so buyer concentration v/s industry is low • Raw material cost constitute more than 50% of the total expenses RIVARLY AMONG EXISTING FIRMS WITHIN AN INDUSTRY • Industry Competition • Highly competitive. • Top five players have mere 18% market share • 18% market share • Lower fixed cost and high working capital 11
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- 13. THREAT OF NEWENTRANTS THREAT OF SUBSTITUTES • Substantial entry • Fairly mild • New company requires high capital. • Other forms of transportation available • Achieving minimum efficient scale is prohibitive • Enter through strategic partnership, buying, merging • Domestic market works well locally than globally POWER OF SUPPLIERS POWER OF BUYERS • the power axis is tipped in industry • The power axis is tipped in the consumers’ favor • Powerful buyers dictate their terms to supplier • Low switching costs from among competing brands. RIVARLY AMONG EXISTING FIRMS WITHIN AN INDUSTRY • Intense due to the entry of foreign companies • Rivalry - high with any product being matched in a few months by the competitors • Technical capabilities • Collaboration with international players 13
- 14. THANK YOU 14