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Thirdly is about threats of potential new entrants. Along with bringing in some new force and new resources to the line, potential new entrants will compete with current companies for source materials and market share. New entrants often bring additional capacities together with them. (Robert et al., 2008)  The threat of potential new entrants comes from two major factors: the entry barrier of that line and the reaction of current companies. Entry barrier mainly includes scale economy，product differentiation, capital needs, conversion cost, governments’ regulation and policy, natural resources, geographical environment and so on.  Reaction of current companies refers to their actions on maintaining market share and retaining customers. The more active actions they take, the threat of potential entrants is weaker. As to the line of daily products, the cost is very low. However, the entry barrier is very high. It is hard for new entrants to get known by customers since big daily manufactures like P&G and Unilever are well known and widely accepted by people all over the world. If a new entrant wants to grab market shares, it has to develop for many years and strive hard on its advertisements, research and development, sales network, brand value and other aspects.

The fourth force is the threat of substitute products. For substitute products can satisfy the same need as other competitors, companies facing a great challenge. (Farhad & Azhdar, 2003) First of all, the price advantage and profit elevation will be limited when some substitute products occur. Then, substitute products manufacturer exert pressures on the current enterprises. In order to face the challenge, current enterprises have to invest more money on product innovation, improve product quality as well as develop distinctive features. All in all, the lower price, better quality the product is and lower customer conversion cost is, the more threatening to current enterprises.

Last but not the least is about the rivalry among existing firms. It usually shows in competitions on price, advertisements, product innovation, after sell services and so on. The rivalry among competitors can be strengthened when the entry barrier of the line is relatively low and there are many strong opponents. Besides, if the competitors lower prices to promote, it will also make their competition more intense.

As Michael Porter’s Five Forces Model applied by many enterprises in their strategy management, it proves to be very effective in several aspects. Once they are understood, a company can develop a strategy that utilizes them to their advantage. (David & Garry, 2010)

Firstly, the five forces model gives a comprehensive overview for enterprises to evaluate their current Marketing situation. It analyzes the forces that influence a company’s management and competence both inside and outside the line. Besides, it considers both current threat and potential threat, i.e. potential new entrants. In managing these five forces, a company can be more alert to market changes so as to make quick adaptations.

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