Lecture 3 External analysis.pptVIP

Risk of entry by potential competitors These are companies who are not currently competing in the industry but have the capabilities to do so – Hill Jones (2002) Profits depressed Barriers are High capital investment Patents专利 Economies of scale Brand Loyalty Restricted distribution channels – Doyle (2002) Porter’s 5 Force Model Risk of entry by potential competitors Bargaining Power of Suppliers Threat of Substitute Products Rivalry amongst Competitive Firms Bargaining Power of Buyers Source: Doyle (2002, p116) Bargaining Power of Buyers The extent to which Buyers or customers can dictate the price and profits of a company命令，指示 If strong can squeeze profits from producers – Doyle (2002)挤压 Multitude of styles, prices consumers can choose from – Andersen (2002) Porter’s 5 Force Model Risk of entry by potential competitors Bargaining Power of Suppliers Threat of Substitute Products Rivalry amongst Competitive Firms Bargaining Power of Buyers Source: Doyle (2002, p116) Bargaining Power of Suppliers High Demand for goods small number of suppliers If raw material suppliers, utilities or trade unions are strong, they can depress the profits to be earned in the industry – Doyle (2002) Porter’s 5 Force Model Risk of entry by potential competitors Bargaining Power of Suppliers Threat of Substitute Products Rivalry amongst Competitive Firms Bargaining Power of Buyers Source: Doyle (2002, p116) Threat of Substitute products An Industry’s attractiveness is less if the product is easily substituted by alternative technology or the products of other industries – Doyle (2002) Athletic运动 trainers – Hiking boots, other types of shoes (not for serious athletic wear) - Andersen et al (2000) Porter’s 5 Force Model Risk of entry by potential competitors Bargaining Power of Suppliers Threat of Substitute Products Rivalry amongst Competitive Firms Bargaining Power of Buyers Source: Doyle (2002, p116) Rivalry Amongst established firms Profitability in the industry may be low if there i