2002 CBS Casebook_32 - PD PD F XC h a n g e Vi e w F XC h a n g e Vi e w er er O W N y bu to k lic C m C lic k to bu y N.c O W w.d o c u-tr a c k w

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Columbia Business School Management Consulting Association Guidebook 2002 32 Please do not duplicate, copy, print or photocopy PORTER’S FIVE FORCES Given how often you have heard (or will hear) about Porter’s Five Forces, you’d think it would do your laundry for you. Well, it is powerful, but it’s best used for determining the competitive strength of a particular industry or when evaluating a strategic decision. How well a company will do (i.e., how good its profit margins and economic returns will be) in a particular industry depends on the strength (power) of the following five factors: Barriers to Entry: How easy it is for firms to enter the industry? Do barriers to entry exist such as patents or high switching costs that make it difficult or unattractive for new entrants to join the market? Threat of Substitutes: Do substitute products exist? Could they exist soon? This doesn’t just refer to competing products that serve the same function, but also products that consumers might buy in lieu of the entire product
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 08/08/2009 for the course CBS casebook taught by Professor Professor during the Spring '09 term at Acton School of Business.

Ask a homework question - tutors are online