Porters 5 Forces

Question 1

What is Porters 5 forces model used for?

Answer 1

It is used to analyse the external forces of a specific industry.

Question 2

What are the 5 forces of Porters 5 forces model?

Answer 2

1. Threat of entry
2. Threat of substitute
3. Competitive rivalry
4. Power of buyers
5. Power of suppliers

Question 3

Considering porters 5 forces in the context of the case study sports centre, what needs to be considered?

Answer 3

1. Threat of entry - It is not easy to enter the market as a sports centre requires a large amount of land. It is also expensive to build and would require significant capital. Low threat.
2. Threat of substitute - There is the threat that people will chose other means to get their physical activity such as use of a commercial gym or home gym set up ect. There may also be pitches at a local park but artifical all weather pitches are difficult to substitue for. Medium threat
3. Competitive rivalry - There is unlikely to be much rivalry as sports centres usually service a specific area and are run by local authorities who do not have a profit making adgenda.
4. Power of buyers - Buyers will be many individuals/small teams who rent out the pitch and so their individual power is low.
5. Power of suppliers - Will not be any regular suppliers although artificial pitch may be a specialised industry and so may have a small amount of power to charge for maintenance and re lays.