CEO and Founder,
440 Industries
In this video, we briefly discuss how Porter’s 5 Forces model can assist entrepreneurs to understand the competitive pressures that lead to shrinking profitability in businesses. The model breaks down this dynamic by identifying 4 separate sources of pressure plus the existing rivalry among competitors.
Bargaining Power of Suppliers.
Number and size of suppliers
The uniqueness of each supplier’s product
Focal company’s ability to substitute
Bargaining Power of Buyers.
Number of customers
Size of each customer order
Difference between competitors
Price sensitivity
Buyer’s ability to substitute
Buyer’s information availability
Switching costs
Threat of New Entrants.
Barriers to entry
Economies of scale
Brand loyalty
Capital requirements
Cumulative experience
Government policies
Access to distribution channels
Switching costs
Threat of Substitute Products.
Number of substitute product available
Buyer propensity to substitute
Relative price performance of substitute
Perceived level of product differentiation
Switching costs
I am an Anglo-Italian business lecturer and consultant based in Florence, Italy. In 2017 I started 440 Industries, an education and training company focused on fashion, music, and technology. Our mission is to help students, entrepreneurs and managers in overcoming the challenges of starting, developing and scaling their business in the creative industries. When there's a will, there's a way!
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