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FIVE FORCES-presentation-converted.pptx
- 2. WHAT ISPORTER'S FIVE FORCES MODEL? It is asimple framework for assessing and evaluating the competitive strength and position of abusiness organisation. LETS GETSTARTED
- 3. HOW CANOUR BUSINESSWIN IN A COMPETITIVE MARKET? NEWENTRIES RIVALS 2008 2010 2014 2018 2022 25 20 15 10 5 0 SALES Your sales depend on how you play in the marketconsidering your own analysis of theexisting forces. How can you sustain? Business analysis is the key to penetrate the market amidst the five forces surrounding yourbusinesss
- 4. 5FORCES SUPPLYPOWER Supplier power is the ability of vendors toincrease prices of yourinputs. BUYERPOWER Buyer power refers to the customers’ power drive down prices. COMPETITIVERIVALRY Competitive rivalry is the strengthof competition THETHREATOFSUBSTITUTION The threat of substitution is the degree to which different products and services can be used instead of youroffering. THETHREATOFNEW ENTRY The threat of new entry is how easily newcompetitors can enter the market. 01 02 03 04 05
- 5. WHY IS IT I MPORTANT? IT HELPSDISCOVER WHERETHEPOWERLIES You get to understand where andwhen can you perform best;it is atool that measures your business' success IT ASSESSESABUSINESS' COMPETITIVENESS Byconsidering the five forces lying around your safest ground, you can better picture out the threats and improve the business competence.
- 6. 01. SUPPLYPOWER Often, the first step is to assess how easy it isfor the suppliers to increase prices of inputs. This depends on the following factors: THENUMBEROFSUPPLIERSOFTHEKEY INPUT HOW UNIQUETHEIRPRODUCTORSERVICEIS THEIRSTRENGTHSANDHOW MUCHCONTROLTHEY HAVEOVERYOU THECOSTOFSWITCHING FROMONETOANOTHER
- 7. 02. BUYERPOWER Whenassessing buyer power, you have to askyourself how easyit is for the customers to bring prices down. This depends on the following factors: THENUMBEROFBUYERS THEIMPORTANCE OFEACHCUSTOMERTOA BUSINESS THECOSTTOCONSUMERSSWITCHING FROMYOUROFFERINGTOPRODUCTSAND SERVICESBYANOTHERCOMPANY.
- 8. 03. COMPETITIVERIVALRY You will be verypowerful if your product or service is unique. If competitors cannot offer what you provide, you will have immense strength. THENUMBEROFCOMPETITORS THEQUALITY DIFFERENTBETWEEN YOURPRODUCTAND COMPETITOR’SPRODUCT ANY OTHERDIFFERENCES SWITCHING COSTSINVOLVEDFOR SUPPLIERSANDBUYERS CUSTOMERLOYALTY
- 9. 04. THREATOF SUBSTITUTION If you provide unique software which automates asignificant process, consumers can easily substitute byconducting the process manually. They maychoose to outsource it aswell. If the substitution is easyand viable, it weakensyour business. FACTORS: PERFORMANCEOFTHESUBSTITUTE PRODUCT COSTOFCHANGE
- 10. 05. THREATOFNEW ENTITY TIME ANDCOSTOFENTERING THEMARKETANDCOMPETING IF THEREAREFEWECONOMIES OFSCALEIN PLACE THEAMOUNT OFPROTECTION FORTHEKEYTECHNOLOGIES The new businesses can swiftly enter the market and weaken your position. However ,if the market hasstrong and durable barriers to entry,youcan maintain afavourable position. FACTORS:
- 11. DIFFERENCEBETWEENSWOTAND PORTER'SFIVE FORCESMODEL PORTER'S 5 FORCES SWOT can be described a more general and overall assessment. often used to geta picture of firm’s current position. focuses on your business and its position focuses on a single growth decision assesses the viability of a specific product or service helps find out how competitors could inhibit you. Both are ways to analyze the business