Environment analysis
According to Ginter(1990), environment means the surroundings of an organization; the climate in w an alternative product is relatively simple
Threat of New Entrants
The threat of new entries will depend on the extent to which there are barriers to entry。 These barriers are typically:
Economies of scale
Capital requirement
Product differentiation
Customer switching costs
Distribution channel
2。4 Threat of Substitutes
A threat from substitutes exists if there are alternative products with lower prices of better performance for the same purpose.
The treat of substitutes is determined by factors like
Brand loyalty of customers
Customer relationships
Switching costs for customers
Current trends, fashion
2.5 Competitive Rivalry
Competition between existing players is likely to be high when
There are many players of about the same size
Low market growth rates (growth of a particular company is possible only at the expense of a competitor)
Players have similar strategies
3. Use of the five forces analysis
Static analysis
The Five forces analysis allows determining the attractiveness of an industry. It provides insights on profitability. Thus, it supports decisions about entry to or exit from and industry or a market segment。 Moreover, the model can be used to compare the impact of competitive forces on the own organization with their
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