The COMPETITIVE INTENSITY of an industry is determined by five/six forces of competition
Porters five/six forces consist of HORIZONTAL and VERTICAL sources of competition
Barriers to entry protect established firms from the THREAT OF NEW ENTRANTS
The price customers are willing to pay depends, in part, on the THREAT OF SUBSTITUTES
BUYER/SUPPLIER POWER depends on the buyers price sensitivity and its relative bargaining power
For most industries RIVALRY between established firms is the major determinant for competition and general level of profitability
COMPLEMENTS increase the value of the product to its buyers
Example: Characteristics of an industry with a very HIGH COMPETITIVE intensity
Example: Characteristics of an industry with a LOW COMPETITIVE intensity
Understanding the barriers to entry is crucial for evaluating the competitive dynamics within any industry. High capital requirements, economies of scale, and absolute cost advantages can deter new entrants, safeguarding the market position of established firms. Product differentiation and government-imposed barriers further fortify these defenses, making it challenging for new players to gain a foothold. Retaliation from existing firms, through aggressive pricing or litigation, can also serve as a significant deterrent.
Buyer and supplier power significantly influence market conditions. Buyers' price sensitivity and the relative bargaining power of suppliers determine the pricing strategies and profit margins within an industry. Factors such as the cost of products relative to total cost, product differentiation, and competition among buyers play a pivotal role in shaping buyer power. Similarly, suppliers' ability to influence prices and terms of supply can impact the overall competitive intensity.
Complements can enhance the value proposition of a product, creating additional demand and increasing profitability. The presence of complements, such as gasoline for cars, can significantly affect a buyer's purchasing decision. Industries with strong complements often see higher customer loyalty and increased sales, as the combined value of complementary products offers a more compelling proposition to buyers.
Got a question about the product? Email us at support@flevy.com or ask the author directly by using the "Ask the Author a Question" form. If you cannot view the preview above this document description, go here to view the large preview instead.
Source: Best Practices in Porter's Five Forces PowerPoint Slides: Porter Five Forces of Competition PowerPoint (PPTX) Presentation Slide Deck, AnyStrategy
Porter's Five Forces Porter's Five Forces Analysis Porter's 5 Forces Growth Strategy Corporate Strategy Bain PowerPoint McKinsey PowerPoint Bain Presentations Bain Frameworks Boston Consulting Group PowerPoint Consulting Frameworks PwC PowerPoint Mercer PowerPoint Bain Templates Accenture Templates McKinsey Templates Boston Consulting Group Templates Accenture PowerPoint Consulting Methodologies Booz Documents PwC Templates Capgemini PowerPoint Oliver Wyman Presentations Boston Consulting Group Frameworks E&Y PowerPoint IBM Presentations Oliver Wyman Templates Strategy Consulting Frameworks Bain Documents IBM Documents Capgemini Documents Roland Berger PowerPoint A.T. Kearney PowerPoint BCG Documents Accenture Frameworks BCG Frameworks BCG PowerPoint Oliver Wyman PowerPoint Consulting Documents BCG Presentations A.T. Kearney Documents Management Consulting Frameworks BCG Templates E&Y Templates Roland Berger Presentations Capgemini Templates Boston Consulting Group Documents LEK Frameworks Booz Allen Presentations E&Y Frameworks McKinsey Presentations Booz Allen Frameworks A.T. Kearney Frameworks IBM Templates Booz Allen PowerPoint Accenture Documents Accenture Presentations A.T. Kearney Templates McKinsey Frameworks Boston Consulting Group Presentations McKinsey Documents LEK PowerPoint Mercer Templates Roland Berger Frameworks Capgemini Frameworks Booz Presentations Roland Berger Templates PwC Frameworks Booz Allen Templates Booz Templates Strategy& Presentations Oliver Wyman Documents Mercer Presentations LEK Documents PwC Presentations LEK Templates IBM PowerPoint Capgemini Presentations E&Y Documents Oliver Wyman Frameworks Booz Allen Documents PwC Documents IBM Frameworks Mercer Frameworks Mercer Documents LEK Presentations Booz PowerPoint Strategy Documents Booz Frameworks A.T. Kearney Presentations Roland Berger Documents Business Frameworks E&Y Presentations Strategy& PowerPoint Deloitte PowerPoint Consulting Process A.T. Kearney Frameworks A.T. Kearney PowerPoint A.T. Kearney Templates A.T. Kearney Documents A.T. Kearney Presentations Business Framework PowerPoint Diagrams Management Model PowerPoint Diagrams Strategic Planning Process Improvement Business Process Re-engineering Business Process Improvement Industry Analysis Environmental Analysis External Analysis Environmental Assessment Strategy Frameworks Strategy Frameworks Compilation Strategy Methodologies Gap Analysis Quality Management Cost Reduction Cost Reduction Assessment COQ Cost Management Quality Management & Assurance Cost Containment Cost Take-out Cost Cutting Cost of Quality Product Launch Strategy Product Go-to-Market Strategy Brand Strategy New Product Development Hoshin Operational Excellence Hoshin Kanri Strategy Execution Policy Deployment Strategy Deployment Hoshin Planning Strategy Deployment & Execution Mission, Vision, Values Vision Statement Process Analysis Process Design Process Analysis and Design Business Process Design Sales Breakout Strategy Sales Strategy Sales Management Breakthrough Strategy PowerPoint Diagrams Compilation Consulting PowerPoint Templates Consulting PowerPoint Diagrams PowerPoint Diagrams Library Market Research Market Analysis Market Intelligence Mind Map Consulting Training Management Consulting Training Organizational Design Organizational Alignment Organizational Effectiveness Organizational Development Strategic Thinking Strategic Analysis
![]() |
Download our FREE Strategy & Transformation Framework Templates
Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S, Balanced Scorecard, Disruptive Innovation, BCG Curve, and many more. |