Porter's Five Model
PROJECT MANAGEMENT
[BBA 615]
PORTER’S FIVE FORCES MODEL
ON SONY CORPORATION
Submitted By:-
SHUBHI SINGH
BBA(4530/09)
PORTER’S FIVE FORCE ANALYSIS CONSUMER ELECTRONICS INDUSTRY
[pic]
1. THREAT OF NEW ENTRANTS - LOW
➢ Economies of Scale
➢ Product Differentiation
➢ Capital Requirements
➢ Switching Costs
➢ Technology, Know-how and Innovation
➢ Government Policy
2. BARGAINING POWER OF BUYERS -HIGH
• Products are fairly undifferentiated
• Buyers face few switching costs
• Online shopping has increased the bargaining power of buyers
• Buyers are price sensitive and demand high quality
3. BARGAINING POWER OF SUPPLIERS - LOW
• Big global supply chain management
(Suppliers are not concentrated)
• Suppliers are forced to cut their prices or go out of business
• Direct negotiation with suppliers in order to encourage:
• Reliable supply
• Faster delivery
• Lower prices
• Many OEMs start to produce their own components in-house
4. RIVALRY AMONG EXISTING COMETITORS - HIGH
➢ Numerous and rather equally balanced competitors.
➢ Short product life-cycle
➢ High R & D costs
➢ Lack of differentiation or switching costs
➢ Imitation of technology
➢ Counterfeit products
➢ Low profit margins
➢ High exit barriers
Threat of Substitute Products
• There are few substitutes from other industries, if any.
• Most of them seem to be obsolete or have one foot out of door.
← For example:
• Digital Camera in the place of Film Camera
• Fax machines in place of overnight mail
[BBA 615]
PORTER’S FIVE FORCES MODEL
ON SONY CORPORATION
Submitted By:-
SHUBHI SINGH
BBA(4530/09)
PORTER’S FIVE FORCE ANALYSIS CONSUMER ELECTRONICS INDUSTRY
[pic]
1. THREAT OF NEW ENTRANTS - LOW
➢ Economies of Scale
➢ Product Differentiation
➢ Capital Requirements
➢ Switching Costs
➢ Technology, Know-how and Innovation
➢ Government Policy
2. BARGAINING POWER OF BUYERS -HIGH
• Products are fairly undifferentiated
• Buyers face few switching costs
• Online shopping has increased the bargaining power of buyers
• Buyers are price sensitive and demand high quality
3. BARGAINING POWER OF SUPPLIERS - LOW
• Big global supply chain management
(Suppliers are not concentrated)
• Suppliers are forced to cut their prices or go out of business
• Direct negotiation with suppliers in order to encourage:
• Reliable supply
• Faster delivery
• Lower prices
• Many OEMs start to produce their own components in-house
4. RIVALRY AMONG EXISTING COMETITORS - HIGH
➢ Numerous and rather equally balanced competitors.
➢ Short product life-cycle
➢ High R & D costs
➢ Lack of differentiation or switching costs
➢ Imitation of technology
➢ Counterfeit products
➢ Low profit margins
➢ High exit barriers
Threat of Substitute Products
• There are few substitutes from other industries, if any.
• Most of them seem to be obsolete or have one foot out of door.
← For example:
• Digital Camera in the place of Film Camera
• Fax machines in place of overnight mail