The document discusses Michael Porter's Five Forces model for analyzing competitive structure in industries. The model assesses the long-term attractiveness of industries by examining five competitive forces: the threat of new entrants, the threat of substitutes, rivalry among existing firms, bargaining power of buyers, and bargaining power of suppliers. A sixth force of other stakeholders was later added. Each force is influenced by several factors like barriers to entry, switching costs, number of competitors and substitutes. The model helps understand industry dynamics but provides just a snapshot and does not capture all complexities or account for corporate social responsibility.

1. Competitive Structure
Of Industries:
Michael Porter’s Model
By: Pranjali Srivastava

3. Michael Porter’s Five(Six)
Forces Model:(Objective)
• Studies about the competition in
the Industry.
• Assesses and Manages Long
Term Attractiveness of the
Industry.
• Assess the structural
attractiveness of the analysed
Industry.
• Explains the relationship between
the dynamic forces that affect
industry’s performance.

4. Porter’s Five(Six) Forces:
• Threat of Entry.
• Threat of Substitutes.
• Rivalry among existing firms.
• Bargaining power of Buyers.
• Bargaining power of Suppliers.
Another sixth force added later on in this model
• Other Stakeholders.

5. Threat of Entry:
• Existence of Barriers to entry.(Patents, Rights etc.)
• Government Policies .
• Capital Requirements.
• Product Differentiation.
• Monopoly Elements.
• Access to Distribution.
• Customer Loyalty to established Brand.
• Industry Profitability(The more profitable the industry
more Profitable it will be for new Entrants.

6. Threat of Substitutes:
• Perceived level of Product Differentiation.
• Buyers Switching Costs.
• Number of Substitutes available in the market .
• Availability of Close Substitute.
• Customer loyalty towards their Brand.
• Quality Depreciation.
• Ease of Substitution.
• Substandard Product.

7. Rivalry Among Existing
Firms:
• Number of Firms and Their Relative Market
Share, Strengths etc.
• Degree of Transparency.
• Level of Advertisement Expense.
• Sustainable Competitive advantage through
Innovation.
• Diverse Competitors.
• Exit Barrier.

8. Bargaining Power of
Buyers:
• Degree of Dependency upon Existing channels
of Distribution.
• Force down Prices.
• Buyers Switching costs relative to Firm’s
Switching Costs.
• Buyers information Availability.
• Buyers price Sensitivity.
• Differential Advantage of Industry Products.
• Availability of existing Substitute Products.

9. Bargaining Power of
Suppliers:
• Suppliers switching costs related to firm
Switching Cost.
• Degree of differentiation of Inputs.
• Importance of Buyer to the Supplier.
• Extent of Substitutability of the Product.
• Extent of Differentiation or Standardisation of
the Product.
• Importance of the Product to the Buyer.

10. Sixth Force :Other
Stakeholders
• It was added in the revised 1990s model.
• Impact of complementary product and
services.
• Reliability of the functions.
• Stakeholders are also the owner of their
stakes in the organisation.

11. Limitations of Porter’s
Model:
• Its just a snapshot of an Industry at a
time.
• It does not tells about the Complex
Dynamics of the Industry.
• It does not takes into account
Corporate Social Responsibility.

12. THANK YOU