dentify and analyze any barriers facing potential entrants including patents, government regulation, average capital investment needed to enter, presence of strong brand names amongst existing firms, economies of scale. Provide quantitative or empirical data when analyzing each barrier.
-Identify and analyze the number and functionality or utility of substitutes available including the price-value relationship between the product and the substitute (i.e. Ottawa-Toronto return train ticket of $200 versus average cost of $100 to rent a car with space for 4 people).
-Substitute is a replacement good/service to meet a need; may not be in same industry (i.e. video conferencing substitutes for business travel).
»Power of Suppliers
-Identify the names of the major suppliers to the industry considering their annual revenues and assets, annual average growth rate to assess relative power.
-Identify whether supplier industry is concentrated or fragmented (i.e. less than 5 firms account for more than 50% of industry sales?). Are suppliers “price takers” or “price makers”?
»Power of Buyers: Customers and Consumers
-Analyze buyer power under both categories of customers (distributors or retailers) and consumers (final end buyer)
-Provide empirical support for whether Buyers-Customers are concentrated or fragmented; identify their aggregate number. Can Buyers-Customers threaten to backward integrate? Are there switching costs? Is the product a commodity which gives buyers more power as no differentiation with commodities except price?
»5 Forces Summary
-Provide a summary of the 5 forces with an overall numerical ranking (average of the 5 individual rankings). Which force(s) is (are) most important i.e. intense?
-The purpose of Driving Forces analysis is to transform Porter’s 5 forces model – which is a static snapshot at one moment in time– into a dynamic “video” of the industry measuring industry change over time.
-Identify and analyze those driving forces. Which competitive force is being affected by the driving force?
»Summary of Industry Analysis
-Provide an overall evaluation of industry attractiveness based on 5 forces analysis, industry growth rate, ROI, ROE and driving forces.
-Is the industry extremely attractive, moderately attractive, moderately unattractive, extremely unattractive and support your assessment.