Understanding 5 Porter’s Forces

Continuing the previous post, I will give a brief description of 5 Porter’s Forces.

  • Threat of Substitution: The goal of this topic is to measure the potential that consumers can replace a product/service for another product from another industry.
  • Threat of New Entry: It means, how easy the market is for a new player approach, basically the more difficult is to a new competitor get in the market, the better for the company that is in this niche.
  • Competitive Rivalry: It measure a product/service versus its existing direct competitors. Therefore, this point is important to understand the differentiation of this product/service in relation of its competitors.
  • Buyer Power: The power that the consumer has to push the price down. If the customer has this power, the company has to adapt its price according to the consumer demand; it means low power of bargain for company.
  • Suppliers Power: The power that the supplier has on the price. If a company has many options of suppliers for the same product, it gives the company the advantage of bargain in relation of its supplier.

I hope you enjoy this post, if it is not clear yet, click in the link of business-to-you.com explaining more with more details the 5 Porter’s Forces.

Vinny.

Five Porter Forces.

Five Porter forces is a model developed by Michael Porter to analyze competitive factors of a specific industry. This model is applied to measure the potential profitability of the company through the following indicators:

  • Threat of Substitution.
  • Threat of New Entry.
  • Competitive Rivarly.
  • Buyer Power.
  • Supplier Power.

I will explain each one in the following posts. Here is a very good example of Five Porter Forces analysis of Facebook made from forbes.com specialists.

https://www.forbes.com/sites/greatspeculations/2014/11/28/facebook-through-the-lens-of-porters-five-forces/#1cd4ca907dd3

Five Porter Forces is a very powerful tool. But, it is a good idea use it together with others tools such as SWOT and PEST analysis in that way one can complete each other. I will write about these different tools in the future.

Vinny.

Primeiro post do blog

Student of Diploma in Business Administration with Concentration in Marketing. As part of my course, I had to create this blog account to approach a theme of my choice and make relevant posts about it. To do so, I decided to post about Marketing for small businesses. Sometimes, the owner has limitations of resources such as financial, knowledge and human. Marketing techniques supports the entrepreneur with effectiveness and lasting solution. But, Understand and apply Marketing foundations in a small business can be very hard. Hope you enjoy the posts and have a fun.
 
Vinny Lodi.