Five Forces Analysis Worksheet
FIVE FORCES ANALYSIS WORKSHEET
Exhibit III-1 Five Forces Affecting Industry Structure
ENTRY BARRIERS Economies of scale Proprietary product differences Brand identity Switching costs Capital requirements Access to distribution Absolute cost advantages Proprietary learning curve Access to necessary inputs Proprietary low-cost product design Government policy and international treaties Expected retaliation RIVALRY DETERMINANTS Industry Growth Fixed (or storage) costs/value-added Intermittent overcapacity Product differences Brand identity Switching costs Concentration and balance Informational complexity Diversity of competitors Corporate stakes Exit barriers Strategic alliances (domestic & international)
NEW ENTRANTS
Threat of New Entrants
INDUSTRY COMPETITORS
Bargaining Power of Suppliers
Bargaining Power of Buyer
SUPPLIERS
INDUSTRY COMPETITORS Threat of Substitutes
BUYERS
DETERMINANTS OF SUPPLIER POWER Differentiation of inputs Switching costs of suppliers & firms in the industry Presence of substitute inputs Supplier concentration Importance of volume to supplier Cost relative to total purchases in the industry Impact of inputs on costs or differentiation Threat of forward integration relative to threat of Backward integration by firms in industry
SUBSTITUTES
DETERMINANTS OF SUBSTITUTION THREAT Relative price performance of substitutes Switching costs Buyer propensity to substitute
DETERMINANTS OF BUYING POWER Bargaining leverage Price Sensitivity Buyer concentration Price/total purchases vs firm concentration Product differences Buyer volume Brand identity Buyer switching costs Impact on quality/ relative to firm performance switching costs Buyer profits Buyer information Decision makers’ Ability to backward incentives integrate Substitute products Pull-through
Exhibit III-2 Force #1: Rivalry
Rivalry Among Players: How intense is the rivalry/competition among firms in your industry? What can you do to protect yourself
Exhibit III-1 Five Forces Affecting Industry Structure
ENTRY BARRIERS Economies of scale Proprietary product differences Brand identity Switching costs Capital requirements Access to distribution Absolute cost advantages Proprietary learning curve Access to necessary inputs Proprietary low-cost product design Government policy and international treaties Expected retaliation RIVALRY DETERMINANTS Industry Growth Fixed (or storage) costs/value-added Intermittent overcapacity Product differences Brand identity Switching costs Concentration and balance Informational complexity Diversity of competitors Corporate stakes Exit barriers Strategic alliances (domestic & international)
NEW ENTRANTS
Threat of New Entrants
INDUSTRY COMPETITORS
Bargaining Power of Suppliers
Bargaining Power of Buyer
SUPPLIERS
INDUSTRY COMPETITORS Threat of Substitutes
BUYERS
DETERMINANTS OF SUPPLIER POWER Differentiation of inputs Switching costs of suppliers & firms in the industry Presence of substitute inputs Supplier concentration Importance of volume to supplier Cost relative to total purchases in the industry Impact of inputs on costs or differentiation Threat of forward integration relative to threat of Backward integration by firms in industry
SUBSTITUTES
DETERMINANTS OF SUBSTITUTION THREAT Relative price performance of substitutes Switching costs Buyer propensity to substitute
DETERMINANTS OF BUYING POWER Bargaining leverage Price Sensitivity Buyer concentration Price/total purchases vs firm concentration Product differences Buyer volume Brand identity Buyer switching costs Impact on quality/ relative to firm performance switching costs Buyer profits Buyer information Decision makers’ Ability to backward incentives integrate Substitute products Pull-through
Exhibit III-2 Force #1: Rivalry
Rivalry Among Players: How intense is the rivalry/competition among firms in your industry? What can you do to protect yourself