THE PORTERS 5 FORCES MODEL (TEMPLATE)

WHIRLPOOL
BARGAINING POWER OF BUYER.
Assess the power of
Buyers Circle one of
the following.
Determinants Defining Question
1 = low, 5 = high, or
N/A if it doesn’t apply
to your industry.
Concentration Are buyer fragmented or highly concentrated (i.e. 1 2 3 4 5
do a few monopolize the market?) If they are few N/A
and concentrated, then buyer bargaining power is
typically high.
Product Cost Does your product buyer’s purchase represent a 1 2 3 4 5
versus Total significant fraction of the buyer’s cost? If so, N/A
Purchases buyer bargaining power is typically high.
Product Is the buyer’s product or serve a commodity? Is 1 2 3 4 5
Differentiation there branding critical to success? Is there any N/A
actual versus a perceived difference? If the
product are standard or undifferentiated, buyers
typically have high bargaining power
Switching Costs Are Switching cost low or high? If buyers face 1 2 3 4 5
few switching costs, their bargaining power is N/A
typically high.
Profits Do buyers earn low profits? If so they are 1 2 3 4 5
typically more likely to bargain hard N/A
Backward Can they make what you make themselves? Is 1 2 3 4 5
Integration there a threat of backward integration? If so the N/A
threat is typically high
Impact on Quality/ Is the product you offer important to the quality of 1 2 3 4 5
Performance the buyer’s product or services? If not buyer N/A
power is typically high
Buyers Does the buyer have complete information on the 1 2 3 4 5
Information product he may purchase? If so buyer power is N/A
typically high

Result: Based on the data provided above, it can be suggested that the bargaining power of
Buyers is slightly high.
 BARGAINING POWER OF SUPPLIERS.
Assess the power of
Suppliers Circle one of
the following.
Determinants Defining Question
1 = low, 5 = high, or
N/A if it doesn’t apply
to your industry.
Concentration Are you supplier are fragmented or highly 1 2 3 4 5
concentrated? (Do a few monopolize the N/A
market)? If an industry is dominated by a few
companies, the suppliers are typically powerful.
Presences of Are there any substitutes for your supplier 1 2 3 4 5
Substitute inputs products? If not suppliers are typically N/A
powerful.
Importance Is your industry an important customer the 1 2 3 4 5
Relative to supplier group? If not suppliers are typically N/A
Customer. powerful
Impact on Quality/ Is your supplier product essential to the quality 1 2 3 4 5
Performance or performance of your business? If so suppliers N/A
are typically powerful
Product Is the supplier’s product or service a 1 2 3 4 5
Differentiation commodity? Is branding critical for success? Is N/A
there an actual versus a perceived difference?
Suppliers with differentiated products typically
have more bargaining power then suppliers
selling commodities.
Switching Costs How costly is it for you to switch from 1 2 3 4 5
suppliers product? If switching costs are high, N/A
suppliers are typically more powerful.
Forward Can the supplier produce the product you 1 2 3 4 5
Integration make? Is there a threat of forward integration? N/A
If so, suppliers are typically powerful

Result: Based on the data provided above, it can be suggested that the bargaining power of
Suppliers is Low.
 INTENSITY OF RIVALRY
Assess the power of
Rivals, Circle one of
the following.
Determinants Defining Question
1 = low, 5 = high, or
N/A if it doesn’t apply
to your industry.
Industry growth How slowly or quickly is the industry growing? If it is a 1 2 3 4 5
slow growth industry, there is likely to be more intense N/A
fights among rivals for market share.
Fixed Cost Does your business have a high fixed cost? If so, rivals 1 2 3 4 5
will typically be tempted to cut prices to ensure sales, thus N/A
posing a significant threat
Intermittent How frequently is there a problem of excess capacity in 1 2 3 4 5
Overcapacity your industry? Are there periods when there is excess N/A
capacity? Overcapacity often leads to price cutting. If so,
there is typically a threat.
Product Is your product or service a commodity? Typically the 1 2 3 4 5
Differentiation closer the product is to being a commodity the fiercer the N/A
intensity of rivalry.
Brand Identity Is branding critical for your Rival’s success? Is there 1 2 3 4 5
actual vs. perceived difference? Brand identification by N/A
buyer reduces the threat of rivals.
Switching How costly is it for your buyer to switch between 1 2 3 4 5
Costs providers? Low switching costs typically increase rivalry. N/A
When a customer can freely switch from one product to
another, companies must struggle to capture and retain
customers.
Concentration Are there a large number of firms of equal size and power, 1 2 3 4 5
and balance all chasing after the same customer? If so rivalry is N/A
typically intense
Diversity of Are there competitors with different strategies and frame 1 2 3 4 5
competitors of reference? When competitors are diverse it is more N/A
difficult to establish the rules of game, so the threat from
competitors is greater.
Corporate How high are the rival’s corporate stakes? What do rivals 1 2 3 4 5
Stakes stand to lose (e.g. profits, decision-making power)? N/A
Strategic stakes are high when several firms in an industry
take great risks to expand, diversify and gain market
position. The intensity and volatility of the rivalry
increases when firms select alternative strategies that may
sacrifice short-term profitability.
Exit Barriers Are exit barriers low or high? High exit barriers make it 1 2 3 4 5
costly to abandon a product. E.g. when an organization has N/A
specialized assets that cannot be easily sold off.
Result: The competitive rivalry of Whirlpool as compared to Miele, Faber & Fisher and Paykei
is slightly high because the competitors are growing in India but the fact that makes Whirlpool
a step ahead from its competitors is they does not produce all major home appliances as
compare to Whirlpool. But

THREAT OF NEW ENTRANTS.

Assess the power of
New Entrants. Circle
one of the following.
Determinants Defining Question
1 = low, 5 = high, or
N/A if it doesn’t apply
to your industry.
Economies of Does successful entry require that companies have 1 2 3 4 5
Scale and significant economies of scale or experience? Barriers N/A
experience to entry are typically high when an aspiring company
must cut costs in order to compete in a large-scale
and/or experienced market.
Product Do new entrants need to differentiate by spending 1 2 3 4 5
Differentiation heavily on advertising, customer services or product N/A
differences to overcome existing customer loyalty?
Product differentiation is typically a barrier to entry.
Brand Identity Do new companies need to spend heavily on brand 1 2 3 4 5
identification to gain customers loyalty? Brand N/A
identification is typically a barrier to entry
Switching Does the buyer have to pay to switch from one 1 2 3 4 5
Costs supplier’s product to another? High switching costs N/A
are typically a barrier to entry.
Capital Does the new company need to invest large financial 1 2 3 4 5
Required resources (relative to market size) in order to N/A
compete? Huge capital requirements are typically a
barrier to entry
Access to Do the new comers have access to distribution 1 2 3 4 5
Distribution channel for product or services? Difficult access can N/A
typically be a high barrier to entry.
Cost advantage Established companies have cost advantages over new 1 2 3 4 5
rivals because they may have already obtained N/A
proprietary product technology, access to raw
materials, favorable locations and government
subsidies. In addition, established company may have
passed a learning or experience curve. Such costs
advantages are typically a barrier to entry for a new
entrant.
Government Government policies, such as antitrust regulations, 1 2 3 4 5
policies can help to preserve or limit competition. Such N/A
policies can typically create a barrier to entry
Expected New entrants may decide not to enter a new market if 1 2 3 4 5
Retaliation existing firms are likely to retaliate. Established firms N/A
 may have a history of retaliating, resources to fight
back, a strong commitment to the industry, and
illiquid assets employed in the industry. Also, if the
industry is growing slowly, they may retaliate against
new players who would threaten sales growth.

Result: The threat of new entrants for automobile industry is low because the industry is
mature with existing intense competition moreover it requires a large investment.

THREAT OF SUBSTITUTION
Assess the power of
Substitutes Circle one
of the following.
Determinants Defining Question
1 = low, 5 = high, or
N/A if it doesn’t apply
to your industry.
Price performance Does the substitute offer a better price or 1 2 3 4 5
performance? A substitute product or service is N/A
a threat to competition when it offers a higher
performance at a given price or the same
performance at a lower price.
Switching Cost Is it costly for buyer to switch to the substitute 1 2 3 4 5
product? When buyers must pay more to switch N/A
to a substitute the threat of substitutes is low.

Result: The threat of substitutes is slightly high for Whirlpool because the cost of replacement
is quiet similar.

Overall Industry Attractiveness Result:

Based on the above analysis we can see that

Power High/Low Positive/Negative
for company
Bargaining power of Buyer is High therefore it is Negative
Bargaining power of Supplier is Low therefore it is Positive
Rivalry or competition is High therefore it is Negative
Threat of New Entrants is Low therefore it is Positive
Threat from Substitutes is High therefore it is Negative
Final Conclusion:
 From a company’s stand point,

Bargaining power of supplier and threat of new entrants forces are Positively effecting the

industry, whereas

Bargaining power of buyer, rivalry or competition & threat from substitutes, are negatively

effecting the company,

Therefore the overall industry is Stable.