Porter

1
Porters FiveForces Model

• David R. Lambert

2
Five-Forces Model
Potential Entrants
Buyers
Supply
Substitutes
3
The Industry

• How many competitors?
• Is the market growing?
• Asset intensity?
• Product differentiation?
• Exit barriers?

4
Potential Entrants

• Ease of entry
• Scale economies?
• Investment?
• Technology?

5
Suppliers

• Forward integration?
• Are there substitutes?
• Our switching costs?
• How many buyers?
• How many suppliers?

6
Buyers

• Their concentration?
• How many suppliers?
• Switching costs?
• Substitutes?
• Backward integration?

7
Substitutes

• Functionally similar?
• Price-performance trends?
• Our industry
• Potential substitutes

8
An Example

• The supermarket channel in the US--why has power
  shifted from the manufacturer to the retailer?