BU111 Lecture 3: Lecture 3: Porter's Five Forces Analysis
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Barriers to entry: you can"t just decide you want to start/create a new bank. Trend in healthy and active living affects unhealthy food companies/industries. Amazon entered book industry by eliminating physical storefronts, establishing warehouses, delivering online. Evaluates impact on 5 separate forces and their effect on the profitability of an industry. Put yourself in the middle box of the model. **be careful of how you define the industry of a product. Solar powered lawn mowers belong in the lawn mower industry, not solar power generators. Apps aren"t in the app industry, but take a look what the purpose of the app is. Suppliers: determine your input costs that affect the numbers on your income statement (profit or not) Buyers: determine your volume of sales, negotiate/influence your price, yet they"re not your competitors. Substitutes: indirect competitors, good/service that provides a similar outcome, does the same job in a similar way but maybe not as good (ex.
