PORTER’S 5 FORCES

Threat of New Entrants

Is the industry you're planning on entering highly profitable? If so in recent

history has there been an increase in new entrants?
What are the barriers to entry? Economies of scale, strong brands, capital
requirements, management team.
Are providing a unique business model? A new approach to the industry?
Start contemplating what the moat around your business is going to be.

/10

Threat of Substitutes

What are other solutions to the consumers' problem?

What are the switching costs for the consumer? Why are they going to switch
to you? Can you make the experience sticky? How can you prevent
consumers from switching from your company to a substitute?

/10

Bargaining Power of Suppliers

1
What kind of suppliers will you need to rely on? Are there plenty of suppliers
offering the same product/service? Does the quality from each supplier differ
greatly?

What are the switching costs associated with switching suppliers? Would
they prevent you from switching?

/10

Bargaining Power of Buyers

Are there more suppliers then buyers? Think about the order sizes, the price
sensitivity from both your end and the suppliers.'

Is the ability to switch suppliers relatively easy? Switching costs are low? Is
the quality of the product/services from these suppliers important to you?
What's your price sensitivity to these as well? Does the quality differ greatly
between suppliers? Would this prevent you from switching suppliers?

/10

Industry Rivalry

Who are the key players to take note of? Is there quality differences between
competitors' offerings? Are the switching costs for consumers relatively low?

Does customer loyalty exist? Is the experience sticky? What are the costs of
leaving the market altogether?

Major determinant of industry profitability is the level of competition. Some

industries are so competitive to the point where prices are pushed below the
level of costs. Is there a possibility you'll be in a price war situation?

2
/10

Overall Score:

Multiple Score
Original Score Multiple
(OG Score x
Multiple)

Threat of New Entrants x 0.15

Threat of Substitutes x 0.15

Bargaining Power of
x 0.15
Suppliers
Bargaining Power of
x 0.15
Buyers

x 0.40
Industry Rivalry

Total: