波特五力模型课件 Porter

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1、Porters Five Forces Industry AnalysisIndustry analysis The profitability of any industry depends upon five environmental factors The five forces The threat of entry The threat of substitution The power of the buyers The power of the suppliers Competitive rivalry within the industryPorters Five Force

2、s of Competition FrameworkSUPPLIERSPOTENTIALENTRANTSSUBSTITUTESBUYERSINDUSTRYCOMPETITORSRivalry amongexisting firmsBargaining power of suppliersBargaining power of buyersThreat ofnew entrantsThreat ofsubstitutesThe threat of entry Threat that new entrants will start up, increase capacity and competi

3、tion and erode profits Depends on the size of the entry barriers Eg scale economies, patentsThe threat of substitution Threat other industries will take business away: eg aluminium industry faces threat from glass, plastics, steel These substitute products place a cap upon industry prices above whic

4、h buyers will desertPower of buyers Power of industrys buyers to secure discounts or negotiate added value to products Depends on buyer concentration, information, switching costs Eg fragmented horticulture industry faces concentrated, expert buyers with low switching costsPower of suppliers Ability

5、 of suppliers to dictate the terms and conditions of supply Supply concentration and differentiation is key Eg operating system component of PC Eg the transmission system in bicyclesCompetitive Rivalry The degree of competition within the industry for market share Especially the degree of price comp

6、etition Some industries are very price competitive Eg airlines Others are non price competitive and highly differentiated in products Eg pharmaceuticalsTHREAT OF ENTRYCapital requirementsEconomies of scaleAbsolute cost advantageProduct differentiationAccess to distribution channelsLegal/ regulatory

7、barriersRetaliationSUBSTITUTECOMPETITION Buyers propensity to substitute Relative prices & performance of substitutesBUYER POWER Buyers price sensitivity Relative bargaining powerINDUSTRY RIVALRYConcentrationDiversity of competitorsProduct differentiationExcess capacity & exit barriersCost condition

8、sSUPPLIER POWER Buyers price sensitivity Relative bargaining power The Structural Determinants of CompetitionExamples of industry analysis Airlines Pharmaceuticals Professional football Road Recovery ServicesAirlines The threat of entry Very high because Deregulated Low start up costs Modest economi

9、es of scale The threat of substitution High in some short haul routes lower in long haul The power of the buyers Considerable Little customer loyalty despite air miles Easy to switch between carriersAirlines Power of the suppliers Considerable Aircraft manufacturers large and very differentiated, hi

10、gh switching costs Unionised staff Capacity shortages in many airports Competitive Rivalry Intense price competition Very high fixed operational costs and low variable costs encourages discounting to maximise utilisation Airlines: conclusion All five forces are operating to the industrys disadvantag

11、e Would expect the industry to experience poor profit performancePharmaceuticals The threat of entry Very low Products protected by patents and copyright Formidable research, development and approval costs of new drugs Very large medical sales force required The threat of substitution Very low Often

12、 no alternative to a drug in dealing with an illnessPharmaceuticals Power of buyers Limited Purchase decisions made by powerful medical profession able to influence what the state or insurance co. must pay for Power of suppliers Negligible Drug ingredients are largely commodities, widely available C

13、ompetitive rivalry Limited Little or no price competitionConclusion on Pharmaceuticals All five forces working to industrys advantage Would expect the industry to be highly profitableProfitability of US IndustriesPharmaceuticals 26.8Gas & Electric Utilities 10.5Tobacco22.0 Food and Drug Stores 10.3H

14、ousehold & Personal Products 20.5 Motor Vehicles & Parts 9.8Food Consumer Products20.3Home Equipment 9.5Medical Products & Equipment 18.8Railroads 9.0Beverages18.8 Hotels, Casinos, Resorts 8.0Scientific & Photographic Equipt.16.5Insurance: Life and Health 7.6Commercial Banks16.0 Building Materials,

15、Glass 7.0Publishing, Printing 14.3 Metals 6.0Petroleum Refining14.3 Semiconductors &Apparel 14. 3 Electronic Components 5.8Computer Software 13.5 Insurance: Property & Casualty 5.3Electronics, Electrical Equipment 13.3 Food Production 5.3Furniture13.3Telecommunications 3.5Chemicals12.8Forest and Pap

16、er Products 3.5Computers, Office Equipment11.8 Communications Equipment (4.0)Health Care11.5 Airlines (34.8)(Grant, 2005)Median return on equity (%), 1999-2002 Some comments on the method Very similar to the structure, conduct performance model Old wine in a new bottles? Porter stresses that the fiv

17、e forces are the only factors: there never any others Example of government as possible “6th” But government should be considered through impact on one or other of the 5 forcesComments 5 forces determine overall industry profitability, not the individual firms In any industry profitable firms work a

18、longside much weaker firms In airlines the environment is very unfavourable but some airlines still do well Percentage of variance in firms return on assets explained by: Industry effectsFirm-specific effectsUnexplained varianceSchmalensee (1985)19.6%0.6%80.4%Rumelt (1991)4.0%44.2%44.8%McGahan & Por

19、ter 1997)18.7%31.7%48.4%Hawawini et al (2003)8.1%35.8%52.0%RoquebertRoquebert et al et al (1996)(1996)10.2%10.2%55%55%32.0%32.0%Misangyi et al Misangyi et al (2006)(2006)7.6%7.6%43.8%43.8%n.an.aDoes Industry Matter?Source: Grant, 6th EdComments Porter on change: A static approach? But Porter emphasi

20、s on the search for change in environmentthe new weaknessesthe new sources of strength Eg: change in road recovery servicesRoad Recovery Services Break down services, once dominated by AA and RAC The Past: Nationwide network of recovery vehicles using own communications system Very high entry barrie

21、rs No close substitute Little price competition between suppliers Buyers had measure of membership loyalty No significant forces amongst suppliersChanges in the road recovery market A new look at the AA and RAC Strategy of supplementing own recovery fleet with local independent subcontractors Techno

22、logy: the development of open mobile phone networks Result: development of a nation-wide network of independent subcontractors, using mobile phone networks to communicateChanges in the 5 forces Essentially vertically integrated businesses performing two functions Running an breakdown insurance plan

23、Running the fleet of breakdown recovery vehicles Strategy changed industry structure: Created two separate industries in place of oneUnwitting consequences? Use of subcontractors dismantled the vertical integration on the margins of the industry Crucially it brought down the entry barriers on the br

24、eakdown insurance function Many entrants without a recovery network of their own: Green Flag, Direct Line, Aviva, Crowded market, very price competitiveConclusions The “5 forces” remains after 30 years the most widely used tool of industry analysis It is the first step in strategic analysis But the individual enterprises performance depends as much or more on its own particular resources and capabilities