Porter's 5 Forces
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Transcript of Porter's 5 Forces
5Khushboo Shah Akash Dhar Trilok Upadhyay Prajna Shetty Prasad Kadam
Born in May 23, 1947
Professor at The Institute for Strategy and Competitiveness, based at the Harvard business school
Leading authority on competitive strategy and the competitiveness .
Author of 18 books Competitive strategy Competitive Advantage etc.
6 times McKinsey Award winner
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RIVALRY
SUPPLIER
POWER
THREAT FROM
ENTRANTSBUYER POWER
THREAT FROM
SUBSTITUTES
Founded in July 7 ,1995
MNC telecom
In 20 countries
Services for 2G, 3G,4G• mobile s• Internet Services• Digital television• IPTV• broadband• Fixed line
Founded in 1991
British MNC Services
• Fixed Line,• mobile s• Internet Services• Digital television
World’s 2nd Largest
In 21 countries
SUPPLIER POWERBUYER POWERTHREAT FROM SUBSTITUTESTHREAT FROM NEW ENTRANTSRIVALRY
Switch Suppliers, Tower ServiceLimited Network EquipmentsProvidersSuppliers
vodafone is a cost leaderabsorb price increases from suppliers Hold suppliers costs down
Cut throat competitionNumber portability International Roaming charges Better buyer position
No bulk PurchaseNumber portabilityNew Connections and schemesNew PlansStrong Subscribers position
Heavy Capital investment Idea Cellular growing rapidlyNew licenses to new entrantsNLD/ILD Operations
Shifts from voice calls to text messageSkype & voice services gain popularity Internet powered softwaresThreat with 4G technology
Easy Avail of SubstitutesReliance had more growth rateServices like Skype, yahoo posing threatCheaper substitues
Capital intensiveUpcoming 4G costsAlready striving operators
Strong rivalsEnhanced investmentMore competitors over the years
Highly competitive marketNew packaged services like quad play Vodafone with iPhone4S
Founded in 1940
Largest chain
68 mn customers
Sells• Hamburgers• French fries• Soft drinks• milkshakes• desserts
Started in 1982 Subsidy Of YUM!
brands Sells
• Fried chicken• Hamburgers• Soft drinks• Refresher drinks
World’s 2nd Largest
In 18,875 locations
SUPPLIER POWERBUYER POWERTHREAT FROM SUBSTITUTESTHREAT FROM NEW ENTRANTSRIVALRY
Strong supplier powerWorlds largest chainMany Franchises
Lower buyer strengthNo choice for customersBrand image thru .differentiation
Many substitutesMc Donalds productsLower threat of losing customers
Competitors like Mc Donalds, pizza Hut
Primary products are differentCheap substitutes like street foodAnd home made food
Difficult to enter in this businessThreat of big brandsHigh cost of entryMore costs on research and
development
Very competitive industryStarted New products like Mc Café Introduction of breakfastsUpdated customer tastes
Low rivalryCustomers wont turn outDifferent target customersStrong position
Lower buyer bargaining powerBuyers have lesser choicesHigh demand from buyers
Helps local suppliersTight control over expensesFixed RatesToo many big giants like
McDonalds, subway etc.
Established brand nameLow barriers for entrantsBrand dominance
Founded in 1893
Carbonated soft dink
2nd largest manufacturer
Brands in 200 countries
Owns Restaurants like• KFC• Taco Bell• Pizza Hut
Founded in 1886
Carbonated drink 400 brands in 200
countries
Focus on selling syrup
SUPPLIER POWERBUYER POWERTHREAT FROM SUBSTITUTESTHREAT FROM NEW ENTRANTSRIVALRY
Raw material, labor supplySwitching costsSubstitute inputsThreat of forward integration
Putting firms under pressureBuyers price sensitivityAvail. Of substitutes
Competing with non price competitionRate of industry growthDiversity of competitorsExit barriers
Low rivalry amongst existing competitors
Rate of growth in industryCosts on advertising and innovations
Lower buyer bargaining powerConvenience StoresSelling through Vending machines
Higher entry barrierEstablished firmsDifficult to sustain Government regulations
Well brand nameSwitching to corn syrupPrice competitionLow bargaining power
Lesser AlternativesBuyer switching costsPerceived level of product
differentiation
Substitute productsSubstituted by carbonated
beverageStrong customers loyalty
Inefficient or over profit marketBarriers to entryGovernment regulationsLicensing requirementsBrand Equity
Founded in 1976 Pioneers and making
Ipad, Ipod and Iphone.
2nd largest IT Company 3rd largest mobile
manufacturer.
Finnish Manufacturer Pioneers in early
mobile industry Largest phone vendor 87k employees in 120
countries Sold To Microsoft
SUPPLIER POWERBUYER POWERTHREAT FROM SUBSTITUTESTHREAT FROM NEW ENTRANTSRIVALRY
Strong CompetitionExorbitant pricesGetting less popularExpensive Softwares
Rivals are way aheadRigid behaviorSlow paceSamsung’s consumer base
Large no. of suppliersVery strong bargaining powerStrong market shareMicrosoft power
Lower supplier powerChangeable ,supplier powerFavorable Pricing
Buyers have less choicesApple is the best in its graphicsStrong brand loyaltyHabitual Customers
Wide choices for the consumersConsumer powerPrice In-differentiationConsumer attachment
Available SubstitutesPrice DifferencesCheap HardwareStrong Brand Position
Strong brand recognitionSubstitutes like Skype, Facebook Cheaper HandsetsDurability
Higher entry barrierEstablished firmsDifficult to sustain Government regulations
Brand IdentityDifficult to sustainLowering prices