Competitive pressure from the sellers of substitute products

Whether substitutes are readily available and attractively priced Whether buyers view the substitutes as being comparable to or better in terms of quality performance and other attributes How much it costs end users to switch to substitutes

 Competitive pressures stemming from supplier bargaining power

 Whether the item being supplied is a commodity that is readily available from many suppliers at the going market price

 Whether a few large suppliers are primary sources of a particular item

 Whether it is difficult or costly for industry members to switch their purchases from one supplier to another or to switch to attractive substitute inputs

 Whether certain needed inputs are in short supply

 Whether certain suppliers provide a differentiated input that enhances the performance or quality of the industrys product

 Whether certain suppliers provide equipment or service that deliver valuable cost saving efficiencies to industry members in operating their production processes

 Whether suppliers provide an item that accounts for a sizable fraction of the costs of industrys products

 Whether industry members are major customer of suppliers

 Whether it makes good economic sense for industry members to integrate backward and self manufacture items they have been buying from suppliers

 Competitive pressure from buyer bargaining power

 If buyers costs of switching to competing brands or substitutes are relatively low

 If the number of buyers is small or if a customer is particularly important to a seller

 If buyer demand is weak and sellers are scrambling to secure additional sales of their products

 Determining collective impact of the five competitive forces Extreme cases Cut throat or red ocean With innovation u r in new industry and its blue ocean

 If buyers are well-informed about sellers products prices and costs

 If buyers pose a credible threat of integrating backward into the business of sellers

 If buyers have discretion in whether and when they purchase the product