poters five forces

Porters why

Analyse competitive enviroment of specific industry

Helps business evaluate the attractiveness of an industry

Profitability decreases when one of the forces is stronger because it can either reduce prices or increase businesses costs

Threat if new entrants

Measures the ease with which new competitors can enter the market and disrupt existing businesses

Depends on barriers of entry - econmies of scale, product differentiation

Threat of substitutes

Risk of customers switching gto alternative products or services that meet the same need

Bargaini g power

Buyers influence customers have over prices and business decisions based on demand and options

Negotiate cheaper prices

If higher- lower profit margins

Bargaining power of suppliers

The control suppliers have over pricing,quality and availability of key recourses

How many suppliers there are? Charge higher prices