5 (five) strengths are:
- The threat of entry of new competitors. Threats to the entry of new competitors lower when the number of obstacles (barriers) for them and height when so easy for them to enter a particular market. An organization must have an "entry barrier", to deter competitors entering the market share.
- The bargaining power of suppliers. Supplier of high power when buyers have little choice of products / services to buy, and low when the buyer has many choices. The existence of the internet makes it easy to find alternative buyers and suppliers can also compare prices from one supplier to another.
- The bargaining power of customers. High-strength buyer when the buyer has many choices of products / services to be purchased and low when buyers have little choice of products / services. For example, in the past, when a student wants to buy a text book in a bookstore, where the bookstore that sells books only slightly. Thus, students have a low strength buyer. But now, with the internet, allowing students to buy books online either in physical form or in electronic form, so that students have a high power of buyers.
- the threat of substitute products or services. Threats to product / service replacement rated high, if there are many alternative products / services and low if at least the product / service outstanding replacement. Increasingly rapid technological development, making more and more products / services alternative replacement. For example, the lack of people who buy the CD, because the music services company via the internet more and more.
- The Rivalry Among Existing firms in the industry. Threats of similar competitors higher if there are many companies that sell products / services in an industry similar and low if the competition was dominated by a few companies
Next I will continue explain about Porter’s Value Chain Model....
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