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.
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