Michael Porter’s five forces model    &Acirc

Michael Porter’s five forces model    Â

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Michael Porter’s five forces model It is appropriate in identifying competitive forces, which affect business in any given environment. These five forces are the threat of companies from same segment, threat of new entrants in the segment, threat from substitute products, threat from the increase in consumer’s bargaining power and threat from supplier’s bargaining power. If in the same segment there are too many players, if the segment is reaching saturation, if no further scope of expansion than to continue operation is difficult for the
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Unformatted text preview: company. If the entry barrier are few and far than it makes easy for companies to enter, making segment un-attractive but if the entry barriers are tough than the company is better off in entering the segment. Substitute products are big threat and limit scope of a price increase. If consumers are better organized, have a choice in terms of product available and can create pressure on profits, making segment un-attractive. Similarly, if suppliers are better organized, less in number and supply is a key raw material for final output than also segment is unattractive....
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Michael Porter’s five forces model    Â

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