Welcome back to our usual appointment with the world of Marketing , where today we want to talk to you about one of the most famous and well-known economic models in the academic world and beyond: we are talking about the Five Competitive Forces Model by Porter, an American academic and economist, dated 1982 but still very popular today. This model is mainly examined by managers and marketing experts to analyze the competitive forces for a given company and in a given economic environment. These forces, called competitive forces, are in fact capable of changing the competitiveness of a market, thus eroding the income produced. Let's see in the following lines what this model consists of and by which forces it is controlled.
Welcome to Pop Up! What are Porter's 5 forces Wanting to analyze Porter's 5 competitive forces model, we have that a market for a specific company Direct competitors; Providers; Clients; Potential entrants; Producers of substitute goods/services; Looking more closely at this model, we find that the first threat brought to the company comes from direct competitors. In fact, these offer the same type of product as us and will compete with us on the basis of two main factors, represented by price and differentiation, which are two extremely important levers, which can tip the scales in our favor or against us. . Other factors are then represented by information asymmetry, the level of concentration of the sector (the number of players competing in the same market niche as us), economies of scale, barriers to exiting Denmark Telegram Number Data the market and positive and negative externalities. Looking at the second force existing on the market, we find the Suppliers. These can profoundly impact our ability to compete. This is because they are the ones who provide us with the raw materials and semi-finished products useful for the production of the product.
These influence our competitiveness based on the prices charged to us and to our competitors, their level of concentration, information asymmetry, the specialization of our product, the possibility of substitution. On the opposite side of the production and distribution cycle, we have the end customers, who are those who purchase my product/service. Obviously these will be sensitive to changes in the price of the product, the availability of better products, the level of loyalty with our entity. In this case we talk about the bargaining power of buyers. Other factors that come into play predominantly in this model are potential entrants, i.e. those who could enter the market in which the company operates. In this case, the reputation of the brand, the agreements with distribution, the capital available and the barriers to entry are of fundamental importance; Producers of substitute goods, those who produce goods different from those produced by the company but which satisfy the same need.
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