Porter s Five Factors analyzes the enterprise, and Porter s Five Forces model affects the five eleme

The five forces are the competitiveness of existing competitors in the same industry, the ability of potential competitors to enter, the substitution ability of substitutes, the bargaining power of merchants, and the bargaining power of buyers.

Porter's Five Forces Model.

It was Michael Porter who proposed it in the early 80s of the 20th century. He believes that there are five forces in the industry that determine the scale and degree of competition, and these five forces together affect the attractiveness of the industry and the competitive strategy of existing enterprises.

Decision-making. State Sentencing.

Porter's Five Forces Analysis is used for the analysis of competitive strategy, which can effectively analyze the competitive environment of customers. The five forces are: the bargaining power of the businessman, the bargaining power of the buyer, the ability of potential competitors to enter, the substitution ability of substitutes, and the current competitiveness of competitors in the industry.

The different combinations of the five forces change and ultimately affect the change in the profit potential of the industry.

In terms of enterprise competition analysis, it is necessary to establish a corresponding Porter's five forces analysis model for each product line of an enterprise to understand the current state of industrial competition. However, if the dynamic monitoring system discussed earlier is concerned, the most important part of the first rush is that the relevant enterprise intelligence information needs to be updated in real time, and of course, the strategy formulation extended according to the relevant information also needs to be dynamically adjusted.

The five forces are the competitiveness of existing competitors in the same industry, the ability of potential competitors to enter, the substitution ability of substitutes, the bargaining power of the first merchant and the bargaining power of the buyer.

In a certain sense, competitive strategy stems from the deep understanding of the laws of competition that determine the attractiveness of the industry. In any industry, whether domestic or international, whether it produces products or provides services, the law of competition will be reflected in the action of these five competitive forces. Therefore, Porter's Five Forces Model is a strategic analysis tool often used by companies when formulating competitive strategies.

The five forces are: the bargaining power of the businessman, the bargaining power of the buyer, the ability of potential competitors to enter, the substitution ability of substitutes, and the current competitiveness of competitors in the industry.

It can be analyzed from these five aspects.

It includes the threat of potential entrants in the Five Forces model, the competition between incumbents in the industry, the threat of substitutes, the bargaining power of buyers and the bargaining power of merchants. Michael. Professor Porter's "Five Forces Model" analysis method is an important tool for analyzing industrial structure.

In an industry, there are five basic competitive forces. The status and comprehensive strength of these five basic competitive forces cause changes in the internal structure of the industry, which determines the intensity of competition within the industry and who is the ultimate winner of the industry's profit maximization.

1) Threat of potential entrantsIf potential competitors enter the market with new production capacity, they must share market share and resources, thus posing a threat to existing enterprises. The magnitude of this threat depends on the market entry barriers, market potential, and the degree of response of incumbents.

2) Competition between existing enterprises in the industry. The intensity of competition among existing enterprises in the industry depends on the market concentration of the industry, the growth rate of the industry, the level of fixed and storage costs, product characteristics and user conversion costs, exit barriers, etc. The competition between the existing enterprises is often manifested in advertising, product introduction, after-sales service and other aspects.

3) The threat of substitutes. The lower the quality, the better the quality, the lower the switching cost for the user, and the greater the competitive pressure that the substitute can generate.

4) The bargaining power of the buyer. The buyer has strong bargaining power when it has the following characteristics: it buys most of the pure trapped products or services of the first merchant; There is potential to produce the product independently; There are many ** quotients to choose from; The cost of switching to other ** merchants is very low.

5) Stool pantsHail When the merchant has the following characteristics, the bargaining power of the merchant will be in an advantageous position: the merchant's industry is controlled by a few enterprises, but there are many buyers; There is no substitute; **Merchants can carry out deep processing and compete with buyers; The buyer buys only a small part of the merchant's product.

Porter's Five Forces analysis analyzes the basic competitive situation of an industry. Therefore, Porter's Five Forces analysis is only suitable for competitive industries, not for monopoly industries.

Strictly speaking, the analysis of the five forces is an excellent tool for theoretical thinking and analysis, but it is very difficult or impossible to obtain in practice. So we must say that the scope of its application, can only say market competition analysis? That's good.

Porter's Five Forces analysis is mainly divided into:

1.Risk of entry by potential competitors:The entry risk of a potential competitor is the height of the barrier to entry.

The main forms of barriers to entry for new competitors include economies of scale, brand loyalty, absolute cost advantage, customer transfer costs, and regulation.

2.The competitive intensity of existing enterprises in the industrial wheel jujube:The competitive intensity of existing enterprises in the industry is mainly a function of the following factors:

The structure of industrial competition, the demand situation, the cost of the rent, and the height of the barriers to industrial exit.

3.The bargaining power of the buyer: refers to the ability of buyers to bargain with companies that produce products in the industry, or the ability of buyers to raise the costs of these companies by demanding better quality and service.

4.**Bargaining power:It refers to the ability of a business to raise inputs or increase industrial costs by reducing the quality of inputs and services.

5.Similarity of industrial alternative products:The existence of close substitution products is a powerful competitive threat because it limits the profitability of products within the industry.

If coffee is too much relative to tea and soft drinks, coffee drinkers will turn to those alternatives.