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Porter's Five Forces Model
Porter's five forces model is mainly used to analyze the competitive landscape of enterprises in this industry and the relationship between other industries. The five major competitive forces determine the profitability of the industry and point out the core of corporate strategy.
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Porter's Five Forces Model
- bacteria
This is a mind map about bacteria, and its main contents include: overview, morphology, types, structure, reproduction, distribution, application, and expansion. The summary is comprehensive and meticulous, suitable as review materials.
- Plant asexual reproduction
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- Reproductive development of animals
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Porter's Five Forces Model
definition
Mainly used to analyze the competitive landscape of enterprises in this industry and the relationship between other industries
effect
Analyze the basic competitive situation of an industry from a large number of different factors brought together in a simple model
The five major competitive forces determine the profitability of the industry and point out the core of corporate strategy
The application lies in choosing the right industry and the most attractive competitive position within the industry
Bargaining power of suppliers Bargaining Power Of Suppliers
who are suppliers
It represents the extent to which suppliers can influence prices
Sellers can easily switch to competition and suppliers cannot influence or control industry prices
less, suppliers can push prices higher
（1） The market is conquered by a few large suppliers
（2） No substitute product available
（3） Supplier customer base is fragmented and their negotiation power is low
（4） Switching from one supplier to another is too costly
Possibility of integrating prospects for higher profits and profit margins
Buyer's bargaining power Bargaining Power Of Buyers
who are customers
high
（1） Customers purchase large quantities of products
（2） The supply industry consists of a number of small operators
（3） Industrial sectors are constrained by high fixed costs
（4） This product consists of substitutes, switching products is simple
（5） Switch products do not result in high costs
（6） Customers are price sensitive and customers can make their own products
Low
（1） When the number of consumers of a particular product or service is small
（2） When a consumer purchases a small amount of a product or service
（3） High cost when switching to different products or services
Threat of new entrants Threat Of New Entrants
Is it difficult to enter this industry?
Disaster
When the barriers to entry in an industry are high, it is difficult for new companies to enter the market due to high costs and fierce competition.
easy
New ventures can take advantage of economies of scale or key technologies
elements
Economies of scale, higher initial investment costs or fixed costs
Cost advantages for existing members
brand loyalty
Intellectual property rights, such as licenses
Shortage of vital resources
Access to raw materials is controlled by existing players
The means of distribution are controlled by existing participants
Players now have secure customer relationships, increasing switching costs for customers
legislation and government action
Threat of substitutes Substitutes
What are substitute goods
When consumers can choose among many substitute goods or services, the buyer determines the price, thereby reducing the bargaining power of the firm
Prevent the creation of substitutes
（1） Customer brand reliability
（2） Ensure customer relationships
（3） Increase costs for customer conversions
（4） The relative price at which substitutes can be realized
（5） latest trends
Level of competition among competitors in the same industry Rivalry
Who are the main competitors in this industry?
When an industry competes monopolistically, firms have complete control over the prices of goods and services
Possibility of emergence of competitors
（1） Players have similar strategies
（2） Little or no differentiation between products leading to price competition
（3） Market growth rate is low
（4） Exit barriers are high
defect
The five forces model is a process that puts the entire industry into a static process, and changes in the industry cannot be static.
The relationship between the five factors was not considered, nor was the dynamic relationship between the five forces expressed.
There is not only competition between enterprises, but also cooperation between enterprises.
answer the questions
Is the competitive state of the industry stronger than “normal”?
Regarding competitiveness, do companies in this industry expect to earn substantial profits?
Is competitiveness strong enough to undermine industry profitability?
Pressure Level
powerful
medium
weak