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FIve threats (Threat from buyers influence (Numbers of buyers is small,…
FIve threats
Threat from buyers influence
Numbers of buyers is small
Product sold to buyers are undifferentiated
products sold to buyers are a significant percentage of buyers final cost
Buyers are not earning significant economic profits
Buyers threaten backward vertical integration
Substitute products
the products or services meet approximately the same customer needs in different ways;
Threats of supplier leverage
suppliers make a wide variety of raw materials,labor and other critical assets
can threaten the industry by increasing the price of their suppliers or by reducing the quality of those suppliers
ATTRIBUTES
Suppliers industry is dominated by small numbers of firms
Little choice to change supplier; thus suppliers have enormous flexibility to change prices, to reduce quality
Large numbers of suppliers firms means that suppliers have less leverage to threaten a firm's profit
Supply unique or highly differentiated products; such as sport players have an enormous bargaining power as a supplier which enables them to extract some of the economic profit that otherwise have been earned by others
The uniqueness of suppliers can operate in any industries
Suppliers are not threaten by substitutes and can take advantage on their position
Suppliers are threaten forward vertical integration
Firms are not important customers for suppliers
Exsisting competitors
By reducing their economic profits
indicated actions
price cutting
frequent new product introduction
intense advertising campaigne
rapid competitive actions and reactions
Industry attributes that generates high levels of direct competition
large number of competing firms
slow industry growth; intense price rivalry
Lack of production; firms are unable to differentiate their products; forced to compete on the basis price;
Production Capacity added in large increments;