The bargaining power of suppliers is determined by the number of suppliers in the market. High bargaining power of suppliers will result in a higher price for resources for your product. You can maintain your position on the market and take advantage of it.
New competitors can easily enter your market when there are low entry costs, few economies of scale, no knowledge-intensity and little protection of key technologies. Your power is affected by the ability of others to enter the market. New entrants are businesses that want to enter your market. Your business has tremendous power since customers cannot find an alternative. The threat is low if there is no alternative for your product.It is easy for buyers to find a different solution than your offering. The threat is high if there are many substitutes.Write down those products or services that can be an alternative for your customers. Substitute products or services offer an alternative for your offering. Buyers and suppliers have nowhere else to go. The intensity is low if there is no one else that offers what you offer.Suppliers and buyers can easily go somewhere else. Your business will likely have little power in the market. The intensity is high if you have many competitors with a similar product or service.Write down their names and the size of their businesses. Identify the existing competitors of your business. Intensity of competition from existing competitors Write down high, moderate or low on Porter’s Five Forces template for each of the following forces. Porter’s Five Forces show that there are five important forces that determine the competitive power of your business. Have a look at the example as well, learn about the practical application of this tool through Porter’s Five Forces of Nike. Use sticky notes to write things on the template, in this way it is easy to add or change things and keep the conversation going. Use Porter’s Five Forces to make a large printout and use this in a brainstorm. You can do Porter’s Five Forces by yourself, but it is more effective if done by a group of people, for example with colleagues.
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