Porter five forces analysis

      i.        Threat of new potential entrants

·         The existence of barriers to entry (patents, rights, etc.) The most attractive segment is one in which entry barriers are high and exit barriers are low. Few new firms can enter and non-performing firms can exit easily.

·         Economies of product differences

·         Brand equity

·         Switching costs or sunk costs

·         Capital requirements

·         Access to distribution

·         Customer loyalty to established brands

·         Absolute cost

·         Industry profitability; the more profitable the industry the more attractive it will be to new competitors.

     ii.        Threat of substitute product/services

·         Buyer propensity to substitute

·         Relative price performance of substitute

·         Buyer switching costs

·         Perceived level of product differentiation

·         Number of substitute products available in the market

·         Ease of substitution. Information-based products are more prone to substitution, as online product can easily replace material product.

·         Substandard product

·         Quality depreciation

    iii.        Bargaining power of suppliers

·         Supplier switching costs relative to firm switching costs

·         Degree of differentiation of inputs

·         Impact of inputs on cost or differentiation

·         Presence of substitute inputs

·         Strength of distribution channel

·         Supplier concentration to firm concentration ratio

·         Employee solidarity (e.g. labor unions)

·         Supplier competition - ability to forward vertically integrate and cut out the BUYER

    iv.        Bargaining power of buyers

·         Buyer concentration to firm concentration ratio

·         Degree of dependency upon existing channels of distribution

·         Bargaining leverage, particularly in industries with high fixed costs

·         Buyer switching costs relative to firm switching costs

·         Buyer information availability

·         Availability of existing substitute products

·         Buyer price sensitivity

·         Differential advantage (uniqueness) of industry products

·         RFM Analysis

     v.        Rivalry among current competitors

·         Sustainable competitive advantage through innovation

·         Competition between online and offline companies

·         Level of advertising expense

·         Powerful competitive strategy

·         Flexibility through customization, volume and variety

Reference

http://en.wikipedia.org/wiki/Porter_five_forces_analysis#Threat_of_new_competition