Reference no: EM133065090
Porter's Five Forces Analysis of New Industry
1. Rivalry among competitors
How many competitors are there in the industry?
What is each competitor's position? How much of the market share has each one captured?
Do companies compete intensely in this industry? If so, do they engage in rivalry and lower prices to gain market share?
Do companies compete to provide additional services or constant innovation?
2. Threats of New Entrants to the Market
What barriers are there to entering the market?
Are there many regulations or legal barriers?
Are there high costs associated with gaining the expertise necessary to produce goods or provide services for the market?
How many other companies are just as prepared or better prepared than yours to enter this industry?
3. Bargaining Power of Suppliers
Which companies provide the raw materials for your product?
Are there many suppliers, or only a few?
Does rivalry between the suppliers drive down the price of some of the raw materials?
Is a virtual monopoly on some of the raw materials by a single supplier likely to drive up the price of raw materials?
Overall, how will the bargaining power of suppliers affect the cost and ease of obtaining the materials necessary to enter the new industry?
4. Threat of Substitute Products
Are other products emerging in this industry that might compete with existing products?
What are these possible competing products?
Are these possible competing products cheaper to produce than the industry's current products?
Are these possible competing products better in other ways?
Could these possible competing products wedge your company out of the market?
5. Bargaining Power of Buyers
How many different companies or consumer groups buy the products sold in this new industry?
If there are only a few customers, would they be able to push to lower the price of the products?
If there are many, are there any organizations that enable the customers to band together and jointly apply pressure to reduce costs of your products?
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