 Background

Porter’s Competition Model

Rivalry
Suppliers
Substitute
Buyers
New Entrants
StakeHolder
 Business
Competition
 Presentors:
Jovhil Manzon
Irish Joy Cabatino
Che-Che Marquez
Ms. Jovhil Manzon
Background
 Porter’s
Competition
Model
Rivalry among
competing
Sellers
What causes
rivalry to be
stronger?
•Active jockeying for
position among rivals
and frequent launches
of new offensives to
gain market shares.
•Industry conditions
tempt some firms to
go on the offensive to
boost volume and
market share
•Customer have low
cost in switching to
rival brands
 •A successful
strategic move
carries a big pay-
off.
Thank you for listening ;))
Ms. Irish Joy Cabatino
Suppliers
-Provides input or doing
supportive role to the
key player belongings
to the middle box who
are competing with one
another.
 Role of
suppliers in
strategic
management
•Competitive
force of
suppliers
Supplier are considered strong
competitors when the following
situation prevails:

A. Items makes up a large portion of

the product costs

B. Costly to buyers to switch supplier

C. Reputation and demand

D. Cheaper

E. Do not content on substitute

F. Buying firms are not important

customer.
•Determinants
of supplier
power
A. Difference in inputs
B. Switching costs of suppliers and
firms in the industry
C. Presence of substitute input
D. Supplier concentration
E. Importance of volume to supplier
F. Cost relative to total puchase in
the industry
G. Impact of inputs on costs or
differentation
•Factors affecting
supplier
bargaining
power
Competitive pressures in the form of
the ff situations:

A. Promote just-in-time deliveries

reduced inventory and logistics
costs.

B. Competitive advantage potential

may occur to industry
Substitute
-Refer to the products or
services in which prospective
buyers can buy or source
elsewhere whose utility
function and other use is
similar to a desired product
for a lesser price or other
reason.
Importance to
strategic
management
•Factors affecting
competition
from substitute
This indicate if the substitute
products are strong force:
A. Sales

B. Producers

C. Profit

D. Popularity
•Determinants
of substitution
threats
A. Relative price of the substitute
B. Performance of the substitute in
the industry
C. Switching costs involve in the act
of substitution.
D. Buyer’s propensity for substitution
E. Regulatory or other factors that
tend to promote product
substitution.
•Switching
Costs
-A factor that leads
prospective customer to
entertaining or considering
the idea of buying or
patronizing other products
for a variety of reason.
“No switching costs is
involve but the direct
benefit of savings on
acquisition costs is the
direct motivator in the part
of the buyer.”
It involves:

Price difference between the old and

new product being offered.

Benefits it promises results to a

decision to consider the idea of
buying .
There’s a lot more coming. Listen
attentively ;))
Ms. Che-Che Marquez
Buyers
. Are objects of desire
of businesses
competing in the
same segment or
industry
Competitive
force of the
Buyers
A. They buy in large quantities
B. They can integrate backward
C. Industries product is
standardization.
D. Their cost in switching to
substitute or other brands are low
E. They can purchase from several
sellers
F. They have high purchasing power
g. The bargaining leverage
H. Buyer concentration versus firm
concentration
I. Buyer switching cost relative to
firms switching cost
J. Buyer information
K. Availability of substitute products
L. Price sensitivity
M. Product Difference
N. Brand Identity
O. Impact on quality and
performance
P. Buyer profits;
Q. Decision-Maker initiatives
 When is
Bargaining
power of
buyers weak?
A. Buyer’s switching cost
to competing brands are
high
B. There is a surge in buyer
demand
C. Seller-Buyer
Collaboration
 Dealing with
the
competitive
force of buyers
A. The price buyers have to pay
for the product
B. The quality of the product sold
to buyers
C. Services, Buyers can expect
from the business
D. Other conditions of the sale
 Potential of
new entrants
 Barriers to
new entrants
A. Economies of sale
B. Access to secret techfnology
C. Brand recognition
D. Capital cost entry
E. Access to distribution channels
F. Lack of experience in carryings
operational activities
G. High customer switching costs.
H. Access to low costs inputs
I. Legislative buyers entry
 The
Stakeholders
Being cooperative is very
much appreciated ;))
Hope we brought something new to
the floor…
Special Guests:
The Girls…
The Boys…
The gremlins with Clap..c
IV-JMktg
Last year na natin toh!!!
Every moment counts ;))
Sa dalawang TRUDIS ng Marketing
HAPPY BIRTHDAY ;))