A method, proposed by Michael Porter, of analyzing an industry's profitability through five competitive forces: rivalry among existing competitors, the threat of new entrants, the threat of substitutes, the bargaining power of suppliers and the bargaining power of buyers.
Japanese name: ファイブフォース分析
Five forces analysis appears in 1 practice question across 1 topic, including Business Strategy and Accounting Basics.
Answer: A. Bargaining power of suppliers
Five forces analysis, proposed by Michael Porter, examines the five competitive forces that determine an industry's profitability: rivalry among existing competitors, the threat of new entrants, the threat of substitutes, the bargaining power of suppliers and the bargaining power of buyers. When there are few companies supplying parts, materials or equipment and alternatives are hard to source, suppliers have strong bargaining power, purchase costs rise and the company's profit is squeezed. Conversely, when the customers buying the products are concentrated in a few large companies, buyers have strong bargaining power.
Five forces analysis, proposed by Michael Porter, examines the five competitive forces that determine an industry's profitability: rivalry among existing competitors, the threat of new entrants, the threat of substitutes, the bargaining power of suppliers and the bargaining power of buyers.
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ABC analysis Break-even point Contribution margin Depreciation Fixed cost Income statement (P/L) Net present value (NPV) Patent Product life cycle Product portfolio management (PPM)