There are five factors which shape industry standards: Threat of New Entrants, Bargaining Power of Buyers, Threat of Substitute products or Services, Bargaining Power of Suppliers, threat of New Entrants and Rivalry Among Existing Competitors as shown below in the figure.
Above model was published in 1979 by Harvard Business Review “How Competitive Forces Shape Strategy” by a young economist and associate professor, Michael E. Porter.
Profitability of a company depends on the above five factors. This model or 5 forces can be used for evaluating strategy, start-up or an existing business among others. To understand industry competition and profitability, one must analyze the industry’s underlying structure in terms of the five forces.
Above model was published in 1979 by Harvard Business Review “How Competitive Forces Shape Strategy” by a young economist and associate professor, Michael E. Porter.
Profitability of a company depends on the above five factors. This model or 5 forces can be used for evaluating strategy, start-up or an existing business among others. To understand industry competition and profitability, one must analyze the industry’s underlying structure in terms of the five forces.
Posts
No comments:
Post a Comment