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					Five Forces

The higher the score, the less benign the industry


The threat of new entrants: barriers to entry

The threat of new entrants: access to cost advantages that are independent of scale

The bargaining power of suppliers

Customer bargaining power

The threats of substitutes

Industry rivalry

Overall




Barriers to entry
Cost advantage
Supplier power
Customer power
Substitute threat
Industry rivalry
Five Forces

The higher the score, the less benign the industry


The threat of new entrants: barriers to entry

The threat of new entrants: access to cost advantages that are independent of scale

The bargaining power of suppliers

Customer bargaining power

The threats of substitutes

Industry rivalry

Overall




                                                             XYZ Ltd: Five forces analysis 2011/12
                                                       6.0




                                                       5.0

Barriers to entry
          Score assessed: 1 = benign, 5 = aggressive




Cost advantage
             4.0
Supplier power
Customer power
Substitute threat
Industry rivalry
                                                       3.0




                                                       2.0




                                                       1.0
0.0
      Q1, 2011   Q2, 2011   Q3, 2011   Q4, 2011
                            Quarters
         Q1         Q2         Q3         Q4            Q5

              2.7        2.8        3.0        3.2           3.3

              3.0        3.0        3.0        3.0           3.0

              2.7        2.8        3.0        3.2           3.3

              2.6        3.0        3.4        3.1           2.9

              1.0        2.0        3.0        4.0           5.0

              2.8        3.2        3.1        3.0           2.9

              1.9        3.0        3.2        3.1           3.1




sis 2011/12



       Q1, 2011 Q2, 2011 Q3, 2011 Q4, 2011 Q1, 2012

              2.7        2.8        3.0        3.2           3.3
              3.0        3.0        3.0        3.0           3.0
              2.7        2.8        3.0        3.2           3.3
              2.6        3.0        3.4        3.1           2.9
              1.0        2.0        3.0        Barriers to entry
                                               4.0           5.0
              2.8        3.2        3.1        3.0
                                               Cost advantage2.9
                                               Supplier power
                                               Customer power
                                               Substitute threat
                                               Industry rivalry
Q4, 2011   Q1, 2012


                      `
Five Forces

The higher the score, the less benign the industry                                Enter the appropriate number in
                                                                         Easy / low
                                                                              1           2
The threat of new entrants: barriers to entry                                      0          0
What is the extent of any economies of scale?
Is the experience curve important?
What size of investment is required to reach cost parity with existing
players?
To what degree do consumers perceive products or services to be
clearly differentiated?
How big are customer's switching costs?
To what degree is industry regulated?

The threat of new entrants: access to cost advantages that are
independent of scale                                                              0          0
Access to distribution channels
Access to essential technology
Access to raw materials
Access to favourable locations
Access to other cost advantages that are independent of scale

The bargaining power of suppliers                                                 0          0
The degree of concentration among suppliers
The relative size of suppliers to buyers

The degree of substitutability between products of various suppliers
The amount of, and potential for, vertical integration
The extent to which the target is important to the supplier
How easily can the target switch suppliers?

Customer bargaining power                                                         0          0
The degree of concentration among customers
The size of customers relative to the target
How easy is it for customers to substitute between products of their
suppliers and potential suppliers?
The ease with which customers can switch suppliers

The amount of, and potential for, vertical integration of customers
The costs / practicality of customers switching suppliers
The importance to the customer of the target's product or service in
terms of its cost base
The importance to the customer of the target's product or service in
terms of quality
The threats of substitutes                                                    0   0
How big is the treat of substitute products / services

Industry rivalry                                                              0   0

Relative market share (there is usually a "U" shaped relationship
between industry concentration and industry rivalry. A high
concentration will not necessarily mean a high level of competition)
Importance of the product / service to the main competitors
Extent to which the objectives of the main competitors are driven by
turnover and market share
"Normal year" supply and demand balance
Industry growth (5 is low because low growth rates makes pursuit of
market share more likely)
Degree of industry differentiation(5 is low because low differentiation
means a higher propensity to price wars

Fixed costs relative to variable costs (the higher the relative fixed costs
the higher is industry sensitivity to volume around break even)
Stage of industry cycle (1 = peak, 5 = trough)
Height of industry exit barriers
ter the appropriate number in the box
                               Difficult / high
                 3          4            5
                      0         0             0   0.0
                                                  0.0
                                                  0.0

                                                  0.0

                                                  0.0
                                                  0.0
                                                  0.0


                      0          0           0    0.0
                                                  0.0
                                                  0.0
                                                  0.0
                                                  0.0
                                                  0.0

                      0          0           0    0.0
                                                  0.0
                                                  0.0

                                                  0.0
                                                  0.0
                                                  0.0
                                                  0.0

                      0          0           0    0.0
                                                  0.0
                                                  0.0

                                                  0.0
                                                  0.0

                                                  0.0
                                                  0.0

                                                  0.0

                                                  0.0
0   0   0   0.0
            0.0

0   0   0   0.0




            0.0
            0.0

            0.0
            0.0

            0.0

            0.0


            0.0
            0.0
            0.0
Five Forces

The higher the score, the less benign the industry                                Enter the appropriate number in
                                                                         Easy / low
                                                                              1           2
The threat of new entrants: barriers to entry                                      2          2
What is the extent of any economies of scale?                                      1
Is the experience curve important?                                                            2
What size of investment is required to reach cost parity with existing
players?
To what degree do consumers perceive products or services to be
clearly differentiated?
How big are customer's switching costs?
To what degree is industry regulated?                                             1

The threat of new entrants: access to cost advantages that are
independent of scale                                                              1          2
Access to distribution channels                                                   1
Access to essential technology                                                               2
Access to raw materials
Access to favourable locations
Access to other cost advantages that are independent of scale

The bargaining power of suppliers                                                 2          2
The degree of concentration among suppliers                                       1
The relative size of suppliers to buyers                                                     2

The degree of substitutability between products of various suppliers
The amount of, and potential for, vertical integration
The extent to which the target is important to the supplier
How easily can the target switch suppliers?                                       1

Customer bargaining power                                                         2          4
The degree of concentration among customers                                       1
The size of customers relative to the target                                                 2
How easy is it for customers to substitute between products of their
suppliers and potential suppliers?
The ease with which customers can switch suppliers

The amount of, and potential for, vertical integration of customers
The costs / practicality of customers switching suppliers                         1
The importance to the customer of the target's product or service in
terms of its cost base                                                                       2
The importance to the customer of the target's product or service in
terms of quality
The threats of substitutes                                                    1   0
How big is the treat of substitute products / services                        1

Industry rivalry                                                              2   4

Relative market share (there is usually a "U" shaped relationship
between industry concentration and industry rivalry. A high
concentration will not necessarily mean a high level of competition)          1
Importance of the product / service to the main competitors                       2
Extent to which the objectives of the main competitors are driven by
turnover and market share
"Normal year" supply and demand balance
Industry growth (5 is low because low growth rates makes pursuit of
market share more likely)
Degree of industry differentiation(5 is low because low differentiation
means a higher propensity to price wars                                       1

Fixed costs relative to variable costs (the higher the relative fixed costs
the higher is industry sensitivity to volume around break even)                   2
Stage of industry cycle (1 = peak, 5 = trough)
Height of industry exit barriers
ter the appropriate number in the box
                               Difficult / high
                 3          4            5
                      3         4             5   2.7
                                                  1.0
                                                  2.0

                      3                           3.0

                                 4                4.0
                                             5    5.0
                                                  1.0


                      3          4           5    3.0
                                                  1.0
                                                  2.0
                      3                           3.0
                                 4                4.0
                                             5    5.0

                      3          4           5    2.7
                                                  1.0
                                                  2.0

                      3                           3.0
                                 4                4.0
                                             5    5.0
                                                  1.0

                      6          4           5    2.6
                                                  1.0
                                                  2.0

                      3                           3.0
                                 4                4.0

                                             5    5.0
                                                  1.0

                                                  2.0

                      3                           3.0
0   0   0   1.0
            1.0

6   8   5   2.8




            1.0
            2.0

3           3.0
    4       4.0

        5   5.0

            1.0


            2.0
3           3.0
    4       4.0
Five Forces

The higher the score, the less benign the industry                                Enter the appropriate number in
                                                                         Easy / low
                                                                              1           2
The threat of new entrants: barriers to entry                                      1          4
What is the extent of any economies of scale?                                                 2
Is the experience curve important?
What size of investment is required to reach cost parity with existing
players?
To what degree do consumers perceive products or services to be
clearly differentiated?
How big are customer's switching costs?                                           1
To what degree is industry regulated?                                                        2

The threat of new entrants: access to cost advantages that are
independent of scale                                                              1          2
Access to distribution channels                                                              2
Access to essential technology
Access to raw materials
Access to favourable locations
Access to other cost advantages that are independent of scale                     1

The bargaining power of suppliers                                                 1          4
The degree of concentration among suppliers                                                  2
The relative size of suppliers to buyers

The degree of substitutability between products of various suppliers
The amount of, and potential for, vertical integration
The extent to which the target is important to the supplier                       1
How easily can the target switch suppliers?                                                  2

Customer bargaining power                                                         1          4
The degree of concentration among customers                                                  2
The size of customers relative to the target
How easy is it for customers to substitute between products of their
suppliers and potential suppliers?
The ease with which customers can switch suppliers

The amount of, and potential for, vertical integration of customers               1
The costs / practicality of customers switching suppliers                                    2
The importance to the customer of the target's product or service in
terms of its cost base
The importance to the customer of the target's product or service in
terms of quality
The threats of substitutes                                                    0   2
How big is the treat of substitute products / services                            2

Industry rivalry                                                              1   4

Relative market share (there is usually a "U" shaped relationship
between industry concentration and industry rivalry. A high
concentration will not necessarily mean a high level of competition)              2
Importance of the product / service to the main competitors
Extent to which the objectives of the main competitors are driven by
turnover and market share
"Normal year" supply and demand balance
Industry growth (5 is low because low growth rates makes pursuit of
market share more likely)                                                     1
Degree of industry differentiation(5 is low because low differentiation
means a higher propensity to price wars                                           2

Fixed costs relative to variable costs (the higher the relative fixed costs
the higher is industry sensitivity to volume around break even)
Stage of industry cycle (1 = peak, 5 = trough)
Height of industry exit barriers
ter the appropriate number in the box
                               Difficult / high
                 3          4            5
                      3         4             5   2.8
                                                  2.0
                      3                           3.0

                                 4                4.0

                                             5    5.0
                                                  1.0
                                                  2.0


                      3          4           5    3.0
                                                  2.0
                      3                           3.0
                                 4                4.0
                                             5    5.0
                                                  1.0

                      3          4           5    2.8
                                                  2.0
                      3                           3.0

                                 4                4.0
                                             5    5.0
                                                  1.0
                                                  2.0

                      6          8           5    3.0
                                                  2.0
                      3                           3.0

                                 4                4.0
                                             5    5.0

                                                  1.0
                                                  2.0

                      3                           3.0

                                 4                4.0
0   0    0   2.0
             2.0

6   8   10   3.2




             2.0
3            3.0

    4        4.0
         5   5.0

             1.0

             2.0


3            3.0
    4        4.0
         5   5.0
Five Forces

The higher the score, the less benign the industry                                Enter the appropriate number in
                                                                         Easy / low
                                                                              1           2
The threat of new entrants: barriers to entry                                      1          2
What is the extent of any economies of scale?
Is the experience curve important?
What size of investment is required to reach cost parity with existing
players?
To what degree do consumers perceive products or services to be
clearly differentiated?                                                           1
How big are customer's switching costs?                                                      2
To what degree is industry regulated?

The threat of new entrants: access to cost advantages that are
independent of scale                                                              1          2
Access to distribution channels
Access to essential technology
Access to raw materials
Access to favourable locations                                                    1
Access to other cost advantages that are independent of scale                                2

The bargaining power of suppliers                                                 1          2
The degree of concentration among suppliers
The relative size of suppliers to buyers

The degree of substitutability between products of various suppliers
The amount of, and potential for, vertical integration                            1
The extent to which the target is important to the supplier                                  2
How easily can the target switch suppliers?

Customer bargaining power                                                         1          2
The degree of concentration among customers
The size of customers relative to the target
How easy is it for customers to substitute between products of their
suppliers and potential suppliers?
The ease with which customers can switch suppliers                                1

The amount of, and potential for, vertical integration of customers                          2
The costs / practicality of customers switching suppliers
The importance to the customer of the target's product or service in
terms of its cost base
The importance to the customer of the target's product or service in
terms of quality
The threats of substitutes                                                    0   0
How big is the treat of substitute products / services

Industry rivalry                                                              2   2

Relative market share (there is usually a "U" shaped relationship
between industry concentration and industry rivalry. A high
concentration will not necessarily mean a high level of competition)
Importance of the product / service to the main competitors
Extent to which the objectives of the main competitors are driven by
turnover and market share
"Normal year" supply and demand balance                                       1
Industry growth (5 is low because low growth rates makes pursuit of
market share more likely)                                                         2
Degree of industry differentiation(5 is low because low differentiation
means a higher propensity to price wars

Fixed costs relative to variable costs (the higher the relative fixed costs
the higher is industry sensitivity to volume around break even)
Stage of industry cycle (1 = peak, 5 = trough)
Height of industry exit barriers                                              1
ter the appropriate number in the box
                               Difficult / high
                 3          4            5
                      6         4             5   3.0
                      3                           3.0
                                4                 4.0

                                             5    5.0

                                                  1.0
                                                  2.0
                      3                           3.0


                      3          4           5    3.0
                      3                           3.0
                                 4                4.0
                                             5    5.0
                                                  1.0
                                                  2.0

                      6          4           5    3.0
                      3                           3.0
                                 4                4.0

                                             5    5.0
                                                  1.0
                                                  2.0
                      3                           3.0

                      6          8          10    3.4
                      3                           3.0
                                 4                4.0

                                             5    5.0
                                                  1.0

                                                  2.0
                      3                           3.0

                                 4                4.0

                                             5    5.0
3   0    0   3.0
3            3.0

6   8   10   3.1




3            3.0
    4        4.0

         5   5.0
             1.0

             2.0

3            3.0


    4        4.0
         5   5.0
             1.0
Five Forces

The higher the score, the less benign the industry                                Enter the appropriate number in
                                                                         Easy / low
                                                                              1           2
The threat of new entrants: barriers to entry                                      1          2
What is the extent of any economies of scale?
Is the experience curve important?
What size of investment is required to reach cost parity with existing
players?                                                                          1
To what degree do consumers perceive products or services to be
clearly differentiated?                                                                      2
How big are customer's switching costs?
To what degree is industry regulated?

The threat of new entrants: access to cost advantages that are
independent of scale                                                              1          2
Access to distribution channels
Access to essential technology
Access to raw materials                                                           1
Access to favourable locations                                                               2
Access to other cost advantages that are independent of scale

The bargaining power of suppliers                                                 1          2
The degree of concentration among suppliers
The relative size of suppliers to buyers

The degree of substitutability between products of various suppliers              1
The amount of, and potential for, vertical integration                                       2
The extent to which the target is important to the supplier
How easily can the target switch suppliers?

Customer bargaining power                                                         2          2
The degree of concentration among customers
The size of customers relative to the target
How easy is it for customers to substitute between products of their
suppliers and potential suppliers?                                                1
The ease with which customers can switch suppliers                                           2

The amount of, and potential for, vertical integration of customers
The costs / practicality of customers switching suppliers
The importance to the customer of the target's product or service in
terms of its cost base
The importance to the customer of the target's product or service in
terms of quality                                                                  1
The threats of substitutes                                                    0   0
How big is the treat of substitute products / services

Industry rivalry                                                              2   4

Relative market share (there is usually a "U" shaped relationship
between industry concentration and industry rivalry. A high
concentration will not necessarily mean a high level of competition)
Importance of the product / service to the main competitors
Extent to which the objectives of the main competitors are driven by
turnover and market share                                                     1
"Normal year" supply and demand balance                                           2
Industry growth (5 is low because low growth rates makes pursuit of
market share more likely)
Degree of industry differentiation(5 is low because low differentiation
means a higher propensity to price wars

Fixed costs relative to variable costs (the higher the relative fixed costs
the higher is industry sensitivity to volume around break even)
Stage of industry cycle (1 = peak, 5 = trough)                                1
Height of industry exit barriers                                                  2
ter the appropriate number in the box
                               Difficult / high
                 3          4            5
                      3         8             5   3.2
                                4                 4.0
                                              5   5.0

                                                  1.0

                                                  2.0
                      3                           3.0
                                 4                4.0


                      3          4           5    3.0
                                 4                4.0
                                             5    5.0
                                                  1.0
                                                  2.0
                      3                           3.0

                      3          8           5    3.2
                                 4                4.0
                                             5    5.0

                                                  1.0
                                                  2.0
                      3                           3.0
                                 4                4.0

                      3          8          10    3.1
                                 4                4.0
                                             5    5.0

                                                  1.0
                                                  2.0

                      3                           3.0
                                 4                4.0

                                             5    5.0

                                                  1.0
0   4    0   4.0
    4        4.0

3   8   10   3.0




    4        4.0
         5   5.0

             1.0
             2.0

3            3.0

    4        4.0


         5   5.0
             1.0
             2.0
Five Forces

The higher the score, the less benign the industry                                Enter the appropriate number in
                                                                         Easy / low
                                                                              1           2
The threat of new entrants: barriers to entry                                      1          2
What is the extent of any economies of scale?
Is the experience curve important?                                                1
What size of investment is required to reach cost parity with existing
players?                                                                                     2
To what degree do consumers perceive products or services to be
clearly differentiated?
How big are customer's switching costs?
To what degree is industry regulated?

The threat of new entrants: access to cost advantages that are
independent of scale                                                              1          2
Access to distribution channels
Access to essential technology                                                    1
Access to raw materials                                                                      2
Access to favourable locations
Access to other cost advantages that are independent of scale

The bargaining power of suppliers                                                 1          2
The degree of concentration among suppliers
The relative size of suppliers to buyers                                          1

The degree of substitutability between products of various suppliers                         2
The amount of, and potential for, vertical integration
The extent to which the target is important to the supplier
How easily can the target switch suppliers?

Customer bargaining power                                                         2          4
The degree of concentration among customers
The size of customers relative to the target                                      1
How easy is it for customers to substitute between products of their
suppliers and potential suppliers?                                                           2
The ease with which customers can switch suppliers

The amount of, and potential for, vertical integration of customers
The costs / practicality of customers switching suppliers
The importance to the customer of the target's product or service in
terms of its cost base                                                            1
The importance to the customer of the target's product or service in
terms of quality                                                                             2
The threats of substitutes                                                    0   0
How big is the treat of substitute products / services

Industry rivalry                                                              2   4

Relative market share (there is usually a "U" shaped relationship
between industry concentration and industry rivalry. A high
concentration will not necessarily mean a high level of competition)
Importance of the product / service to the main competitors                   1
Extent to which the objectives of the main competitors are driven by
turnover and market share                                                         2
"Normal year" supply and demand balance
Industry growth (5 is low because low growth rates makes pursuit of
market share more likely)
Degree of industry differentiation(5 is low because low differentiation
means a higher propensity to price wars

Fixed costs relative to variable costs (the higher the relative fixed costs
the higher is industry sensitivity to volume around break even)               1
Stage of industry cycle (1 = peak, 5 = trough)                                    2
Height of industry exit barriers
ter the appropriate number in the box
                               Difficult / high
                 3          4            5
                      3         4            10   3.3
                                              5   5.0
                                                  1.0

                                                  2.0

                      3                           3.0
                                 4                4.0
                                             5    5.0


                      3          4           5    3.0
                                             5    5.0
                                                  1.0
                                                  2.0
                      3                           3.0
                                 4                4.0

                      3          4          10    3.3
                                             5    5.0
                                                  1.0

                                                  2.0
                      3                           3.0
                                 4                4.0
                                             5    5.0

                      3          4          10    2.9
                                             5    5.0
                                                  1.0

                                                  2.0
                      3                           3.0

                                 4                4.0
                                             5    5.0

                                                  1.0

                                                  2.0
0   0    5   5.0
         5   5.0

6   4   10   2.9




         5   5.0
             1.0

             2.0
3            3.0

    4        4.0

         5   5.0


             1.0
             2.0
3            3.0

				
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