"The competition is alive and hungry - continue to relentlessly move the business forward!"
The five forces are the following:
IV. Supplier Power
V. Barriers to Entry / Threat of Entry
Suppliers have power on a producing industry that requires raw materials, labor, components, and other supplies. Powerful suppliers can exert influence on the producing industry, such as selling raw materials at a high price to capture some of the industry's profits. The following outlines the factors:
Suppliers are powerful:
- Credible forward integration threat of suppliers
- Suppliers are concentrated
- Significant costs to switch suppliers
- Customer powerful
An example of a strong supplier would be Microsoft to computer manufacturers.
"Software suppliers are trying to make their software packages more 'user-friendly' Their best approach, so far, has been to take all the old brochures, and stamp the words, 'user-friendly' on the cover" - Bill Gates
Suppliers are weak:
Reference additional Strategic writings:
- Many competitive suppliers - product is standardized
- Purchase commodity products
- Credible backward integration threat by purchasers
- Concentrated purchasers
- Customers weak
An example of a weak supplier is the auto parts industry.
Strategic Planning - Porter's 5 Forces - Industry Analysis (Part 3 of 5)
Strategic Planning - Porter's 5 Forces - Industry Analysis (Part 2 of 5)
Strategic Planning - Porter's 5 Forces - Industry Analysis (Part 1 of 5)
Strategic Planning - 3 components of a Mission Statement (Part 3 of 3)
Strategic Planning - 3 components of a Mission Statement (Part 2 of 3)
Strategic Planning - 3 components of a Mission Statement (Part 1 of 3)
Strategic Plan - Set the Future!
Strategic Planning - PEST Analysis