Porters 5 Forces

[jboston5]

Super qualitative topic area but Im having a real difficult time determining (within each force) which factors and their direction high vs low, concentrated vs not ect reduce industry profits. Does anyone have a quick cheat sheet with everything broken down or a quick way in your head to remember the cues???
Many Thanks

 

[S2000magician]

If you remember them as they’re normally written:

1. Rivalry among existing competitors
2. Threat of new entrants
3. Threat of substitute products
4. Bargaining power of buyers
5. Bargaining power of suppliers

then it’s pretty easy: an increase in any one of the five things listed increases industry competition:

• Increased rivalry among existing competitors increases industry competition
• Increased threat of new entrants increases industry competition
• Increased threat of substitute products increases industry competition
• Increased bargaining power of buyers increases industry competition
• Increased bargaining power of suppliers increases industry competition