This document discusses Porter's 5 forces model and competitive advantage. It provides background on Porter developing the 5 forces model to analyze industry competitiveness and profitability. It explains that competitive advantage is any feature of a business that allows it to earn higher returns despite competitive pressures. The document then discusses Fabrikam, a proposed business producing biodegradable sanitary pads made from banana fiber as a more sustainable alternative to plastic pads.

1. FABRIKAM
Porter’s 5 forces Model
U s e d f o r c o m p e t i t i v e n e s s i n a m a r k e t

2. Competitive
advantage
C o m p e t i t i v e a d v a n t a g e i s a n y
f e a t u r e o f a b u s i n e s s f i r m
t h a t e n a b l e s i t t o e a r n
h i g h e r r e t u r n s o n i n v e s t m e n t
d e s p i t e c o u n t e r p r e s s u r e
f r o m c o m p e t i t o r s .
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3. Background
 W h e n - M i c h a e l p o r t e r
c a m e u p w i t h t h e 5 f o r c e s
m o d e l w h e n h e w a s
r e s e a r c h i n g t h e n a t u r e o f
t h e c o m p e t i t o r s .
 F o c u s e s o n - I n d u s t r i e s
d i f f e r f r o m o n e o t h e r w i t h
r e s p e c t t o f a c t o r s l i k e
p r o f i t a b i l i t y , p r o d u c t
d e v e l o p m e n t e t c .
 P o r t e r o u t l i n e d t h e 5
f a c t o r s t o a n a l y z e t h e
p r o f i t a b i l i t y a n d
a t t r a c t i v e n e s s o f a f i r m .
 U s e s - i f y o u a r e t r y i n g t o
s t a r t a n e w b u s i n e s s .
3Michael

4. FABRIKAM 4

5. FABRIKAM
saathi sanitary
napkin
Biodegradable & Compostable sanitary
pads made from banana fiber.

6. ABOUT PRODUCT
saathi pads are biodegradable and made from banana fibre. Most pads
are 90% plastic and made from chlorine-bleached wood pulp. saathi do not
let gels, chemicals or synthetic fibres near your body, to prevent itching and
rashes. saathi pads can also degrade within 6 months- 1200x faster than
plastic pads.
Banana fibre is an eco-friendly material that provides you great absorbency.
The fibre comes from the stem of the banana tree. There are more than 1.2
million acres of banana trees planted in India, and they require less water
and fertilizer to grow than cotton. Before there was a use for banana fibre,
farmers would compost the banana trees after each harvest. Now, they
earn extra income by selling the fibre and you get all-natural pads.
You may dispose of saathi pads normally in a waste bin. saathi pads
degrade within 6 months of disposal under normal conditions.
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7. 7

8. FABRIKAMFABRIKAM
• Banana is an important fruit crop and can be easily found in
states of India. Therefore, there are ample number of
suppliers in India . India has a production of 208 lakh tons in
the area of 6 lakh ha.
• The resources held by the supplier are not scarce.
• The cost of switching to an alternative supplier is not high as
there are large no of suppliers with small market shares.
• The customer market is large and significant .
• Plant and machinery is to be set up in southern part of India
so that transportation cost in supply can be minimized.
• As our business is set up in the southern part of the country ,we will have
an edge over new entries in terms of better accessibility .
• Barrier which can be really effective for minimizing entry of new entrants
is price our product, our price will be less than the other substitutes
because of the cost cutting measures we have incorporated for the
promotion of our business such as social and awareness campaigning
,MLM ,etc. instead of advertisements.
• Also, we have decided to give employment to unskilled and skilled rural
women because of the simplicity in product manufacturing ,there is little
need for skilled technicians as the production process is not complex .
• Our participation in social and awareness campaigns as well as our idea of
giving employment opportunities to women will lead to high customer
loyalty. 8

9. FABRIKAMFABRIKAM
• Market size is large as our product is the neccessity of every
woman .
• Differentiated product by its quality as saathi is highly
degradable.
• Switching costs to other suppliers is high for the customer.
• saathi comes with variety of options for the customers :
• 1. Jumbo pack(25 pads in 1 pack): costing Rs. 45
• 2. Regular pack(12 pads in 1 pack) : costing Rs. 22
• 3. Mini pack(8 pads in 1 pack) : costing Rs.15
• Customers will be flexible in choosing from the variety of options
available ,choosing the pack which offers him value for money
and flexible usage.
• There are too many pads manufacturing companies of pads
but 90% of it are made up of plastic but saathi is made up of
banana fiber which differentiate it from other substitutes.
• Other substitute is cotton pads, but banana tree requires
less water and less time to fertilize as compare to cotton
plant.
• Good quality standards lead to customer loyalty by which
they are not willing to substitute easily. Same as in the case
for switching costs.
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10. FABRIKAM 10
• There are too many existing companies producing pads ;
Stayfree , whisper, Sofy but our company has
differentiated its product before entrering into the
market. saathi is made up of banana fiber which is an
innovation in this industry.
• The fixed and variable cost are minimized due to:
1. Inclusion of women workers as the variable factor.
2. The cost of the fixed factors i.e. land , building ,machinery etc. is
minimized as the production process is not complex and dost not
require large and complex machinery and infrastructure.
• Our product is made from banana fiber ,thus adding to
the concern about mother earth which is the need of the
hour.
• Also, our business due to its uniqueness and giving
employment to rural women contributes its small yet
useful share to CSR which every firm should add in its
objective .

11. FABRIKAM
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P P T B y : -
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