PORTEROV MODEL ,,PIATICH SÍL,,
Bargaining power of suppliers
•Suppliers are powerful when the supplier’s product
–is important to the buyer‘s business
–has high switching costs
•and when supplier companies
–are dominant and more concentrated than the buyers
–sell to small and unimportant customers
–are not obliged to contend with substitute products
–pose a threat of forward integration.
Bargaining power of buyers
•Buyers are powerful if they
–purchase large volumes compared to sellers‘ sales
–pose a threat of backward integration
–have full information
–the product is unimportant to the quality of the buyer‘s product
–purchases are standard or undifferentiatedswitching costs are low.
Pressure from substitutes
•Substitutes are products/services that can perform the same function in a better way
•They limit the potential profitability of an industry
•They place a ceiling on the prices that can be charged in an industry
•Responses to threats from substitutes are often an industry-wide action.
•The most dangerous substitutes are those that
–improve the price-performance relationship
–are produced by profitable industries.