FAQ
Porter's Five Forces
Note that these responses are not official additions to the theory, only explanations for the cases based on the specific questions received.
How should I arrange my answer to part A of this question?
Follow the outline in the handout Porter's Five Forces Overview.
In other words, Section 1 - Threat of entry, part (a) economies of scale, part (b) product differentiation, etc. A final part should be (g) summary of threat of entry. In this section, just briefly summarize how important the threat of new competitors entering the market is.
Then, Section 2 - Intensity of rivalry, part (a), etc., etc. Finally, Section 6 should briefly summarize the overall competitive situation including which factors are most important and why.
I am having trouble determining who the supplier is in this case. Does a company always have suppliers?
Yes. What does the company sell and where does it get it (or what is needed to make it) from?
Is it possible that suppliers and customers could be the same company?
Although not the usual case, it is possible. For example, in contract manufacturing, a company may buy parts from a manufacturing company, assemble them, and then sell them back to the same company (or industry) as a finished product or sub-assembly.
- Last revised 04/09/2005 -