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【正文】 costs from one supplier to another are high. Bargaining Power of Suppliers (II) There is the possibility of the supplier integrating forwards in order to obtain higher prices and margins. This threat is especially high when: The buying industry has a higher profitability than the supplying industry. Forward integration provides economies of scale for the supplier. The buying industry hinders the supplying industry in their development (. Reluctance to accept new releases of products). The buying industry has low barriers to entry. Bargaining Power of Customers (I) They buy large volumes, there is a concentration of buyers. The supplying industry prises a large number of small operators. The supplying industry operates with high fixed costs. The product is undifferentiated and can be replaces by substitutes. Switching to an alternative product is relatively simple and is not related to high costs. Bargaining Power of Customers (II) Customers have low margins and are pricesensitive. Customers could produce the product themselves. The product is not of strategical importance for the customer. The customer knows about the production costs of the product. There is the possibility for the customer integrating backwards. Competitive Rivalry between Existing Players There are many players of about the same size Players have similar strategies There is not much differentiation between players and their products, hence, there is much price petition Low market growth rates (growth of a particular pany is possible only at the expense of a petitor) Barriers for exit are high (. expensive and highly specialized equipment) Five Forces Analysis: Key Questions and Implications ? What are the key forces at work in the petitive environment? ? Are there underlying forces driving petitive forces? ? Will petitive forces change? ? What are the strengths and weaknesses of petitors in relation to the petitive forces? ? Can petitive strategy influence petitive forces (eg by building barriers to entry or reducing petitive rivalry)? Internal analysis 5M analysis: Men Money Machinery Material minutes
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