Porter's 5 Forces Flashcards
(7 cards)
1
Q
what is porter’s 5 forces used for?
A
for assessing the attractiveness of an industry
2
Q
what does porter’s 5 forces consist of?
A
- threat of new entrants
- threat of substitutes
- bargaining power of suppliers
- bargaining power of customers
- competitive rivalry
3
Q
threat of new entrants?
A
how likely it is for new entrants to enter the market
e.g., market attractiveness, barriers to entry
4
Q
competitive rivalry?
A
how intense is competition among existing players in the market
e.g., customer loyalty, switching costs
5
Q
threat of substitutes?
A
are substitutes available and are consumers likely to switch to them
6
Q
power of customers?
A
do customers have power to drive price down
e.g., number of customers, large number of competitors
7
Q
power of suppliers?
A
do suppliers have enough power to increase their prices?
e.g., few large suppliers, products are differentiated, high switching costs
