Porter’s Five Forces of Industry Competitiveness
Substitution Threat:
Relative Price Performance
Switching Costs
Buyer Propensity
Etc…
Supplier
Power
Supplier Power:
Supplier Concentration
Differentiation of inputs
Switching Costs
Importance of Volume
Ability to Forward Integrate
Etc…
T. Smith, Forest Products Consolidation, May 2001
Threat of
Substitution
Industry
Rivalry
Threat of New
Entrants
Entry Barriers:
Economies of Scale
Capital Requirements
Access to Distribution
Etc…
Rivalry Determinants:
Concentration and Balance
Growth
Intermittent Overcapacity
Product Differences
Exit Barriers
Etc…
Buyer Power
Buyer Power:
Buyer Concentration
Buyer Volume
Buyer Switching Costs
Ability to Backward Integrate
Price Sensitivity
Etc…
Five Forces of Industry Competitiveness (Supply
Chain)
Manufacturer
G-P
L-P
J.M. Huber
Phenix Biocomposits
Raw Material Supplier
Timber
Resins
Etc…
Supplier
Power
Channel Member
Home Depot
Carolina Holdings
Cameron Ashley
Georgia Pacific
Subs.
Threat
I/R (Mnfr.)
Subs.
Threat
Buyer
Power
I/R (Dist.)
Supplier
Power
New
Entrants
T. Smith, Forest Products Consolidation, May 2001
New
Entrants
End-User/Customer
DIY Customer
Pulte Homes
Herman Miller
Buyer
Power
Bargaining Power of Suppliers
Bargaining Power of Buyers
Threat of New Entrants
Threat of Substitutes
Rivalry Among Competitors