<ul><li>Know how strong your suppliers are.</li><li>Is there a supplier you are dependent upon?</li><li>Is there anything you can do to reduce this?</li><li>What are the chances that the supplier would be able to sell directly to your customers if it did not depend on your business?</li><li>Is there an alternative product or method you could use to reduce your vulnerability?</li></ul>

4) Bargaining Power of Suppliers

The tool was created by Harvard Business School professor Michael Porter, to analyze an industry's attractiveness and likely profitability.Since its publication in 1979, it has become one of the most popular and highly regarded business strategy tools.Porter recognized that organizations likely keep a close watch on their rivals, but he encouraged them to look beyond the actions of their competitors and examine what other factors could impact the business environment.He identified five forces that make up the competitive environment, and which can erode your profitability.

Business Strategy Tool

<ul><li>In industry analysis, it is important to understand who your competitors are and how you compare them.</li><li>From the outside looking in, it may seem that everyone is a competitor.</li><li>However, take a closer look and you will find that there are both direct and indirect competitors depending on the industry.</li><li>For example, the direct competitor for Netflix is Amazon Prime, Disney+, Hulu, etc but its indirect competition is in games such as PUBG, Fortnite, etc.</li></ul>

5) Rivalry among Existing Competitors

Analyze your buyers' strengths.<ul><li>Do buyers have the upper hand in this market?</li><li>Can buyers easily switch brands?</li><li>Could some of your customers be in such a strong position to make you vulnerable?</li><li>What impact will it have on your company if you're dealing with businesses with low-profit margins?</li></ul>

3) Bargaining Power of Buyers

<ul><li>Consider the ease with which new companies can enter the market.</li><li>Many factors need to be considered, such as barriers to entry (patents and high set-up costs), the profitability of the business, and the brand's reputation.</li></ul>

1) Threat of New Entrants

<ul><li>Analyze how easily your products can be substituted with others.</li><li>It will depend on factors such as its relative price, accessibility, and quality.</li><li>All alternatives should be considered, not just similar products.</li><li>As an example, airlines compete not just with other airlines, but with train and bus operators as well.</li></ul>

2) Threat of Substitute products

Porter's Five Factors is a model that identifies and analyzes five competitive forces that define every sector and aid in determining an industry's strengths and weaknesses.

Michael Porter's Five Forces is a simple but powerful tool for understanding the competitiveness of your business environment, and for identifying your strategy's potential profitability. The tool was created by Harvard Business School professor Michael Porter, to analyze an industry's attractiveness and likely profitability. Since its publication in 1979, it has become one of the most popular and highly regarded business strategy tools. Porter recognized that organizations likely keep a close watch on their rivals, but he encouraged them to look beyond the actions of their competitors and examine what other factors could impact the business environment. He identified five forces that make up the competitive environment, and which can erode your profitability. These are: 1) Competitive Rivalry. 2) Supplier Power. 3) Buyer Power. 4) Threat of Substitution. 5) Threat of New Entry.

strategy

Strategy

problemsolving

Problem Solving

business

Business

Michael Porter's Five Forces is a simple but powerful tool for understanding the competitiveness of your business environment, and for identifying your strategy's potential profitability.
The tool was created by Harvard Business School professor Michael Porter, to analyze an industry's attractiveness and likely profitability. Since its publication in 1979, it has become one of the most popular and highly regarded business strategy tools. Porter recognized that organizations likely keep a close watch on their rivals, but he encouraged them to look beyond the actions of their competitors and examine what other factors could impact the business environment. He identified five forces that make up the competitive environment, and which can erode your profitability. These are:
1) Competitive Rivalry. 
2) Supplier Power. 
3) Buyer Power. 
4) Threat of Substitution. 
5) Threat of New Entry.

Weekly Concepts is on a mission to make understanding business concepts, and the world of business, easy for everyone.

Whether you're a student or an experienced professional, we strive to provide you with a comprehensive understanding of business concepts that are easy to understand, concise, relevant, and actionable. Our channel features topics such as marketing, HR, finance, operations, and leadership. And best of all, every video is presented in a way that’s easy to understand, so you can improve your professional and personal life by expanding your knowledge of business concepts.

Get notified when new videos are released by subscribing to Weekly Concepts.

Check out our digital assets https://koji.to/k/8AL7
