ENTREPREN

EURSHIP
Chapter 2
COMPETITION
COMPETITION

This the contest between several firms

selling similar goods or services. Different
companies attempt to meet the same
consumer needs with their version of a
product and, when successful, earn more
revenue as people choose to buy their
offering.
 How does
competition affect
the entrepreneurs?
Is there a need for a
competition in the
market?
Can the market
exist without a
competition?
 01
FORCES OF
COMPETITION
MODEL
MICHAEL PORTER

The tool was created by Harvard Business

School professor Michael Porter. Since its
publication in 1979, it has become one of
the most popular and highly regarded
business strategy tools
Forces of Competition Model

01 02 03
Buyers Potential New Entrants Competitive Rivalry

04 05
Substitute
Suppliers
Products
COMPETITIVE
RIVALRY

Such rivalries can lead to price wars,

high-priced marketing battles, and races
for slight advances that could mean a
competitive advantage. These tactics can
stimulate companies to make ever better
products but also erode profits and market
stability.
NEW ENTRANTS

These are new or existing

organizations that are not currently
competitors, but could potentially
enter the market that your
company operates in.
SUPPLIER POWER

Suppliers are powerful when they are the

only source of something important that a
firm needs, can differentiate their product,
or have strong brands. When the power of
suppliers in an industry is high, this raises
costs or otherwise limits the resources a
firm needs.
 BUYERS

When customers have more strength, they

can exert pressure on businesses to
provide better products or services at
lower prices.
 THREATS OF
SUBSTITUTE

When customers can find substitutes for a

sector's services, that's a major threat to the
companies in that industry. In other words, it is
a product or good that acts as a replacement or
alternative to a more popular item without
noticeably affecting the composition or
appearance, or the usefulness of the resulting
product.
 ACTIVITY 1.
MIS’ AND MATCH
ACTIVITY 2.
DEBATE