Porters 5 forces Flashcards
1
Q
Definition of porters five forces?
A
A method of analysing the operating environment of a competition of a business.
2
Q
lists porters 5 forces
A
- Threat of entry
- Supplier power
- Buyer power
- threat of substitute goods
- international competition
3
Q
what is supplier power
A
bargaining power of suppliers allowing them to:
- exert market power
- sell products at higher prices
4
Q
what is buyer power
A
Powerful customers are able to exert pressure and drive down prices.
5
Q
what is threat of entry
A
the ability for new entrants to enter the market and gain market share. causing an increase in competition. It is effected by barriers to entry.
6
Q
what is rivalry
A
number of competitors in the market
7
Q
what is are substitute products
A
A similar product that meets customer needs. Substitute goods will limit the price that can be charged and reduce profits. (effected by customer loyalty)
