Michael Porter Competitive Strategy Techniques for analyzing industries and competitors

The Porter Model Potential Entrants Threat of Substitute The Model Potential Entrants Bargaining Power of Suppliers Industry Competitor Bargaining Power of Buyers Threat of Substitute

Industry Competitor Competition Drives Down the Rate of Return Consolidated Industries, Little Room for Mistake Among Rivals Lack of Differentiation or Less Switching Cost Merger and Acquisition Increases Competition High Strategic Stake in Achieving Success for Each Company Economies of Scale is Crucial Strategic Alliances and More

Threat of Entry Economies of Scale by Businesses Product Proliferation High Capital Requirement for Investment High Switching Cost for Customers Cost Advantage by the Established Businesses/ Price as a Barrier Access to Viable Distribution Channels Government Regulations

Threat of Substitute Lack of Differentiation Among Various Existing Products Low Switching Cost for Customers Innovation in the Industry and less Innovated Products Brand Names and Quality of Products Weak Distribution and Customer Service Fragmented Industries More Prone to Differentiated Products

Bargaining Power of Buyers Price a Fraction of Buyers Cost, Buyers less Price Sensitive The Switching Cost is Low. Availability of Similar Products in the Market Forward and Backward Integration Lessens the Bargaining Power of Buyer. Self Manufacturing and Self Distribution by Car Industry The Information of Buyer on the Market, Demand, Competition and Market Wholesalers as Buyers can Impose Bargaining Power Over Suppliers When Customers decision on Buying can be influenced by Retailers

Bargaining Power of Suppliers When the Industry is Dominated by a Few Suppliers When the Supplier Competes with Alternative Supply and Suppliers When the Supplier Sells not to one Industry but More The Supplier's Product is Crucial to Producer's Product The Suppliers Product is Well Differentiated The Supplier Threat of Forward Integration Exists Government Influence in the Industry for Substitute Product

Strategic Group Within an Industry Strategic Groups are Leading Companies in an Industry. They Have Reached Economies of Scale and Occasionally Scope Entry Barriers are Imposed mostly by Strategic Group in an Industry Mobility Barriers Are determined by Skills, Resources, Strategies and Cost Strategic Groups Have Different Amount of Power vis-à-vis Buyers and Suppliers Strategic Groups are Exposed to Substitute Products for Product Line, Differentiation, Demographic Change, Customers……

Consolidating a Fragmented Industry Creation of Economies of Scale Standardization by Innovation Rectify the Problem of a Fragmented Industry by Looking at the Causes. For Example Diseconomies of Scale Initiate Acquisition and Merger Explore and Investigate the Industry Trends in terms of Customer Needs and Innovation Firms that Cannot help Consolidating an Industry are the Ones with Lack of Skills, Myopic, not Aware of the External Environment, and Organizationally not Ready