Introduction
    • This chapter looks at:
        –Factors that shape competition
        –Competitive advantage            at the industry and 
          national levels
        --Hypercompetitive industry
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                          Industry Analysis: 
               Forces Influencing Competition
    • Industry – group of firms that produce 
       products that are close substitutes for each 
       other
    • Michael Porter
        identifies five 
        forces that 
        influence 
        competition
                          Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall
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   Porter’s Five Forces                         New Market Entrants, 
       of Competitive                           eg:
                                                •entry ease/barriers
             Position                           •geographical factors
           Examples                             •incumbents resistance
                                                •new entrant strategy
                                                •routes to market
    Supplier Power, eg:                         Competitive Rivalry, eg:                    Buyer Power, eg:
    •brand reputation                           •number and size of firms                   •buyer choice
    •geographical coverage                      •industry size and trends                   •buyers size/number
    •product/service level quality              •fixed v variable cost bases                •change cost/frequency
    •relationships with customers               •product/service ranges                     •product/service importance
    •bidding processes/capabilities             •differentiation, strategy                  •volumes, JIT scheduling
                                                Product and Technology 
                                                Development, eg:
                                                •alternatives price/quality 
                                                •market distribution changes
                                                •fashion and trends
                                                •legislative effects
                      © alan chapman 2005, based on Michael Porter's Five Forces of Competitive Position Model. 
      Not to be sold or published.  More free online training resources are at www.businessballs.com.  Alan Chapman accepts no liability.
    Example Airline Industry
  http://youtu.be/hUWAwor9rcA
                            Porter’s Force 1: 
                       Threat of New Entrants
       • New entrants mean downward pressure on 
          prices and reduced profitability
       • Barriers to entry determines the extent of 
          threat of new industry entrants
                          Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall
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