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GSM Lecture 5
Management
> Global Strategic Management >
Conditions >
Macro/microenvironment >
Porter's 5 Forces > 5 Forces explained
5 Forces explained
Threat of new entrants
The threat of new entrants depends on the barriers to entry, which
are affected by:
- Economies of scale
- Production differentiation
- Large start-up requirements
- Switching costs for customers (costs of time and/or money, such
as cost of breaking contract, cost of spending time looking for
another option, or the cost of transferring to another firm)
- Poor access to supply and distribution channels
- Price cuts and advertising by companies
Threat of substitute products
The threat of substitute products (from other industries) will depend
upon:
- How effectively those products meet the specific customer need
- The price and performance of those goods relative to the goods
produced by the industry itself
- Switching costs for customers
- The willingness of customers to substitute
Five Forces continued
Market analysis
System views
The Macroenvironment
Porter's Diamond
Diamond explained
Problems
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