Entry barriers
value
Brand identity
+3
Capital requirements
+1
Expected retaliation
-2
Government policy
+1
Access to distribution
+1
Learning curve
+1
Switching cost
-2
Average
+0.43
There is a cost advantage relative to
purchases. But government's price flooring
can be less conducive. The chance of
forward integration from suppliers is less.
Switching suppliers is not unfavorable
since supplies are undifferentiated and
there are a lot of suppliers in the market.
Substitutes
Situation:
Favorabl
Capital requirement to enter exist but not e
significant. Government policies can
work as barriers. However, expected
retaliation from the market is less for this
industry and switching costs are low
which are not favorable to our company.
Suppliers’ power
value
Differentiation of inputs (supplies)
+2
Threat of forward integration
+2
Importance of volume for the supplier
+3
Switching cost
+1
Supplier concentration
+2
Cost relative to total purchases
+1
Average
+1.83
Situation:
Favorable
Volume is highly important for suppliers
where the supplies are undifferentiated.
value
Substitute’s relative price performance
-1
Buyer propensity to substitute
-2
Switching cost
-2
Average
-1.67
Situation:
Unfavorab
The market is price sensitive and there are le
lower priced substitutes available where
the substitute's price performance is
relatively better. Switching cost for our
product is also lower. The buyer also has a
moderate tendency to shift towards
substitutes in the market.