Industry would mean telecom
If company is mentioned Jio
One of the companies is competitors
A force is something that moves in the particular direction whether pull or push .Example - gravity .
Porter exist within one industry and affect them within that industry .
example- In a fruit market there will many sellers , they will have rivalry among themselves.
Rivalry among competitors
Rivalry - diversity - no diversity there will be more rivalry
number of competitor - there will be more rivalry
Industry concentration - Some industry is concentrated in some areas , example diamond mining will have to concentrate in that particular area.
Industry growth - Growth will have more market share .
Quality differences - No quality differences will have between the offering of competitors then the rivalry is more .
Brand Loyalty- If customer don't have brand loyalty , There is no certainty more rivalry will be there.
Barriers to exit - So a petroleum industry is not easy to exit from that industry because lot of investment is made on purchasing machinery , labour , license .
A home bakery to exit is very easy , i can sell the materials is easy
High barrier - high rivalry
Switching cost - Cost involved in consumer from one product to another .
Example - mixer grinder part is broken , no mixer , same bowl will be preference . No new mixer is preference .
IOS to android switching is also very difficult .
High switching cost - Less rivalry
Threat of new entrants -
Threat can be high or low . There is no limit in number.
Barriers to entry - how difficult or easy is it to enter the industry
High barrier - example railway. Low threat
Economies of scale - Existing company like Jio has already achieved economies of scale ( Cost of production coming down ), Jio charges lesser price from consumer. The company is able to produce at lower cost .
New entrant cannot match it, they have high cost of production.
Brand Loyalty - New entrants will not be there if customer is loyal
Capital requirements - High capital requirements no new entrants
Cumulative experience - Generation to generation a industry is working so new entrant will not come .
Government policies - Railway , aviation limit the entry
Access to distribution channels - Mining industry , if one area of Jharkhand is good at mining , if they monopoly they have access to distribution channel , checking from police will be less .
Switching costs - Same as above
Bargaining power of Buyers and Suppliers
Fruit Market example - The fruit is coming from farmers or middlemen . The buyer are the people who will consume it .
Suppliers case
Farmers produce and sell to sellers , buyers are residents nearby living .
If there are number and size of suppliers high they have more bargaining power.
A unique product of supplier will have low bargaining power .
Focal company ability to substitute - Easy substitute the supplier there will be more bargaining power in the hands of the fruit sellers .
Buyers
Number of customers - When number of customers are more the bargaining power of customer will high .
Size of each customer order -Let us say during office break , 20 colleagues are going to fruit shop to eat , cutting , the customer will have more bargaining power.
Differences between competitors- A fruit seller who have dragon fruit is different from competitors , then there will be more bargaining power .
Price sensitivity - If a price sensitive market , customer has bargaining power .
Buyers ability to substitute- A buyer can substitute .
Buyers information ability - Doctor fees cannot be bargain
Switching costs- If it is easy from one service provider there will be more bargaining power .
Threat of substitutes products -
If you think of CAR industry . The car is a threat of industry .
Number of substitute product - more substitute more threat
Buyer propensity to substitute - if consumer is ready to use the substitute then high threat
Relative price performance of suppliers
Perceived level of product
Switching cost
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