1. SM 472.42 4 Winter 2012

2. Industry Rivalry Entrants Substitutes SuppliersBuyers Porter

3. Industry Rivalry Entrants Buyers Substitutes Porter Industry Suppliers

4. Industry Rivalry Entrants Buyers Substitutes Suppliers Porter Suppliers  Product characteristics Differentiated product Input essential No substitutes High switching costs  Customers care about source materials

5. Industry Rivalry Entrants Buyers Substitutes Suppliers Porter Suppliers  Relationship characteristics Fewer suppliers than buyers Your suppliers have more important customers Forward integration potential  Supplier’s viability under threat  Non-rational involvement

6. Industry Rivalry Entrants Buyers Substitutes Porter Industry Suppliers

7. Industry Rivalry Entrants Substitutes Porter Industry Buyers

8. Industry Rivalry Entrants Buyers Substitutes Suppliers Porter Buyers  Product characteristics Volume purchases | Big ticket items Standardized product Low switching costs Low profit margins

9. Industry Rivalry Entrants Buyers Substitutes Suppliers Porter Buyers  Relationship characteristics Fewer buyers than sellers Purchase not as important as sale Buyer has all relevant information Backward integration potential  Purely rational purchases

10. Suppliers Industry Rivalry Entrants Substitutes Porter Industry Buyers

11. Substitutes Buyers Suppliers Industry Rivalry Porter Industry Entrants

12. Industry Rivalry Entrants Buyers Substitutes Suppliers Porter Entrants  Production characteristics Minimal economies of scale Few other cost disadvantages Low differentiation Low capital requirements Low switching costs Little proprietary technology

13. Industry Rivalry Entrants Buyers Substitutes Suppliers Porter Entrants  Relationship characteristics Low product | experience loyalty Easy access to distribution channels Little government policy intervention  High-prestige industry “LOW BARRIERS TO ENTRY”

14. Substitutes Buyers Suppliers Industry Rivalry Porter Industry Entrants

15. Buyers Suppliers Industry Rivalry Entrants Porter Industry Substitutes

16. Industry Rivalry Entrants Buyers Substitutes Suppliers Porter Substitutes  Interchangeability Low switching costs Comparable  price  quality  experience Low product | experience loyalty  Customers view relationship as commercial

17. Buyers Suppliers Industry Rivalry Entrants Porter Industry Substitutes

18. Industry Rivalry Entrants Substitutes SuppliersBuyers Porter

19. Substitutes Buyers Suppliers Entrants Porter Industry Rivalry

20. Entrants Buyers Substitutes Suppliers Porter Industry rivalry  Product & production characteristics Slow growth Low demand Low differentiation High stakes Large capacity increments High fixed costs High exit barriers

21. Industry Rivalry Entrants Buyers Substitutes Suppliers Porter Industry rivalry  Relationship characteristics Numerous rivals Rivals equally balanced Low switching costs Diverse competitors Low brand loyalty  Customer taste in flux  Non-rational participants

22. Substitutes Buyers Suppliers Entrants Porter Industry Rivalry

23. Entrants Substitutes SuppliersBuyers Porter Understand causes Focus action Guide choice

24. Industry Rivalry Entrants Substitutes SuppliersBuyers Porter Understand causes Focus action Guide choice

25. Readings  rocket metaphor  organizational analysis

26. Porter Analyses Carson Toys Adrenaline Sports your cases others…?

27. Canadian airline industry  “Generic”  Product/Market  Goals  SWOT TOWS matrix  BCG matrix  Environmental scanning  Five Forces useful?

28. For Next Week Tue  Mintzberg  Wheelen  ch 5 situation analysis Fri  Case Presentations