1. THE FIVE COMPETITIVE FORCES THAT
DETERMINE INDUSTRY PROFITABILITY

2. THE FIVE COMPETITIVE FORCES
• New Entrants
• Suppliers
• Buyers
• Substitutes
• Industry Competitors

3. NEW ENTRANTS
- Threat of New Entrants
• Economies of Scale
• Proprietary Product Differences
• Brand Identity
• Switching Costs
• Capital Requirements
• Access to Distribution
• Absolute Cost Advantages

4. NEW ENTRANTS
• Proprietary learning curve
• Access to necessary inputs
• Proprietary low-cost product design
• Government policy
• Expected retaliation

5. BARGAINING POWER OF SUPPLIERS
• Differentiation of Inputs
• Switching Costs of Supplier and Firms in the Industry
• Presence of Substitute Inputs
• Supplier Concentration
• Importance of Volume to Supplier
• Cost Related to Total Purchases in the Industry
• Impact of Inputs on Cost or Differentiation
• Threat of Forward Integration Related to Threat of Backward
Integration by Firms in the Industry

6. BARGAINING POWER OF BUYERS
• Buyer Concentration Versus Firm Concentration
• Buyer Volume
• Buyer Switching Costs As Relative to Firm
Switching Costs
• Buyer Information
• Ability to Backward Integrate
• Substitute Products
• Pull Through

7. BARGAINING POWER OF BUYERS
• Price/Total Purchases
• Product Differences
• Brand Identity
• Impact on Quality/ Performance
• Buyer Profits
• Decision Maker’s Incentives

8. THREAT OF SUBSTITUTES
• Relative Price Performance of Substitute
• Switching Costs
• Buyer Propensity to Substitute

9. INTENSITY OF RIVALRY
• Industry Growth
• Fixed(or Storage) Costs/ Value Added
• Intermittent Over Capacity
• Product Differences
• Brand Identity
• Switching Costs
• Concentration and Balance Informational
Complexity

10. INTENSITY OF RIVALRY
• Diversity of Competitors
• Corporate Stakes
• Exit Barriers