(2)The

Bargaining Power of (3) The Intensity of Rivalry among

Buyers CompeGtors in an Industry
A buyer group is powerful when Interacting factors lead to intense rivalry
It is concentrated or purchases large volumes
relative to seller sales Numerous or equally Lack of differentiation or
The products it purchases from the industry are balanced competitors switching costs
standard or undifferentiated Slow industry growth Capacity augmented in
The buyer faces few switching costs High fixed or storage large increments
It earns low profits costs High exit barriers
The buyers pose a credible threat of backward
integration
The industrys product is unimportant to the
quality of the buyers products or services

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(3)The Intensity of Rivalry among

(4)The Threat of New Entrants
CompeGtors in an Industry
Price competition
Profits of established firms in the industry
Advertising battles may be eroded by new competitors
Product introductions Sources of entry barriers
Increased customer service or warranties Economies of scale
Product differentiation ( product identification and
customer loyalty)
Capital requirements
Switching costs
Access to distribution channels
Cost disadvantages independent of scale
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