Skip to main content

Michael portal's 5 forces model to analyse industry attractiveness

FeedbackMedium Priority

Widget request:*

I think that adding the Michael portal's 5 forces model to analyse industry attractiveness in the idea evaluation process will be very beneficial for all startups.

Let me explain it in short so that everyone around here grasps the feature and it's benefit:

Michael porter's framework provides holistic view and considers multiple layers of an industry's dynamics. However it is static.

*“Michael porter's 5 forces model”*: (keep in mind it helps analyse competitive environment of a industry)
1. Threat of new entrants

2. Threat of substitutes

3. Rivalry among existing firms

4. Bargaining power of suppliers

5. Bargaining power of buyers

Posted by An Anonymous User ·
Status: Completed2 comments

Log in to comment and vote

Comments2

  • WebPlover Dev

    •

    Feb 12, 2022

    Let me share some examples of it in short, you can Google the rest by yourself or feel free to ask me: 🙂 Michael porter's 5 forces mode helps analyse competitive environment of a industry: 1. Threat of new entrants Barriers to prevent: • cost advantages • economies of scale • product differentiation • access to distribution channels • government regulations • retaliation of current industry players 2. Threat of substitutes It is difficult to respond to the threat of substitute products as it's often even outside the industry. 3. Rivalry among existing firms They want our clients, distribution channels, good employees, and suppliers. 😤 If 4 companies dominate 80% of market share it is highly concentrated. In highly concentrated markets go for niche strategy. 4. Bargaining power of suppliers Suppliers can exercise pressure by: - raising prices - lowering quality - reducing availability The easier for a company to circumvent its suppliers, the high bargaining power it has in negotiations of price, quality and terms of delivery. 5. Bargaining power of buyers "The Client is always right!" because clients are where company's business comes from. Elements of buyers' bargaining power: - the more fragmented the number of clients is, the less bargaining power they will have. (Zara vs IBM) - high switching costs decrease the bargaining power of buyers. (ERP system installation cost barrier) - if clients have multiple alternatives, there bargaining power increases. (Microsoft vs Car manufacturers) - in the market of highly differentiated products, buyers are not interested in price. (Ferrari or Rolex)

    • Niek

      •

      Feb 17, 2022

      Hi there WebPlover Dev 👋 Thanks so much for the great detailed feedback. We think Michael Porter's 5 Forces model is a perfect fit as a new widget option in the business plan. We have added it to our planned features and will look to release it later in the year. Thanks for your great suggestion 🙌