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of
buyers
Bargaining
power of
suppliers
© Dr Adrian Kuah 2008
Supplier Power
• Factors determining power of
suppliers relative to producers
are same as those determining
power of producers relative to
buyers.
© Dr Adrian Kuah 2008
Power of Suppliers Is
High If:
• Industry is not price sensitive, as when:
􀂙 cost of supplied product is low relative to total industry
costs
􀂙 the suppliers’ products are easy to differentiate
􀂙 the industry is not facing stiff competition for its products
• Supplier bargaining power is high, as when:
􀂙 size and concentration of suppliers is high relative to the
industry
􀂙 industry has high switching costs
􀂙 industry is not well-informed
􀂙 supplier has the ability to integrate forward
© Dr Adrian Kuah 2008
POTENTIAL
ENTRANTS
Threats of
New entrants
INDUSTRY
COMPETITORS
Rivalry Among
Existing Firms
SUBSTITUTES
BUYERS
SUPPLIERS
Threat of
substitute products
or services
Bargaining
power of
buyers
Bargaining
power of
suppliers
© Dr Adrian Kuah 2008
Threat of
Substitutes
• buyer propensity to substitute
• relative price performance of
substitutes
• Low degree of differentiation
© Dr Adrian Kuah 2008
Threat of Substitutes
Is High If:
􀃑Buyer propensity to substitute is high
􀃑Relatively good price performance of
substitutes
􀃑Low degree of differentiation
􀃑BUT there is also the possibility that one's
own products could find new markets as
substitute for some other product.
© Dr Adrian Kuah 2008
POTENTIAL
ENTRANTS
Threats of
New entrants
INDUSTRY
COMPETITORS
Rivalry Among
Existing Firms
SUBSTITUTES
BUYERS
SUPPLIERS
Threat of
substitute products
or services
Bargaining
power of
buyers
Bargaining
power of
suppliers
© Dr Adrian Kuah 2008
Threat of New
Entry
• economies of scale
• strong learning curve
• product differentiation
• capital requirements
• access to distribution channels
• governmental and legal barriers
• retaliation by established
producers
© Dr Adrian Kuah 2008
Threat of Entry Is
High If:
􀃉 Few economies of scale
􀃉 Not a strong learning curve effect
􀃉 Low capital requirements for entry
􀃉 Difficult to differentiate the product
􀃉 Easy access to distribution channels
􀃉 No legislation preventing entry
􀃉 Little retaliation expected
© Dr Adrian Kuah 2008
POTENTIAL
ENTRANTS
Threats of
New entrants
INDUSTRY
COMPETITORS
Rivalry Among
Existing Firms
SUBSTITUTES
BUYERS
SUPPLIERS
Threat of
substitute products
or services
Bargaining
power of
buyers
Bargaining
power of
suppliers
© Dr Adrian Kuah 2008
Industry Rivalry
• Takes in the form of jockeying
for position, using tactics like
price war, advertising battles,
product introduction and
increased customer services.
© Dr Adrian Kuah 2008
• concentration
• diversity of competitors
• product differentiation
• excess capacity
• high exit barrier本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。