Five Forces Example
You can find this storyboard in the following articles and resources:
Porter's Five Forces of Competitive Analysis
by Nathanael Okhuysen
Industrial organization is a field of study that examines the differences between the “perfect” competition among companies found in economics textbooks, and the “imperfect” competition found in the real world. One tool derived from the field is Michael Porter’s “five forces” analysis, from the very beginning of his seminal book, Competitive Strategy. Porter developed the five forces analysis as a more rigorous variation of the widely used SWOT analysis. The framework focuses on the level of competition within an industry to evaluate a company’s strategic position. In contrast to the SWOT analysis, the five forces survey the business environment, rather than examining a particular firm itself. Along with the PEST analysis, it digs deeper into the Opportunities and Threats of the SWOT.
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Storyboard Description
An analysis of competition in the widget industry using Porter's Five forces framework.
Storyboard Text
- Slide: 1
- Rivalry
- • The widget market is well established and saturated; growth is slow• Commoditization of widgets leads to very low customer loyalty
- Slide: 2
- Subsitution
- WIDGET! Get yours today!
- All new!
- • Widgets are traditional• Alternatives lack the flexibility of widgets• Wodgets are the most common substitute.• Smart-widgets could become a threat.
- Slide: 3
- Sellers
- All others
- Acme Corp.
- XYZ Minerals
- • Acme Corp. currently supplies 53% of all raw materials for widgets• All widget raw materials are commodities• Cost of raw materials constitute 1/3 of costs
- Slide: 4
- Buyers
- • Consumer-grade widget distribution highly fragmented• Widgets are nonessential• Buyers are very price sensitive
- Slide: 5
- New Entrants
- • Facilities require capital investment• Increasing returns to scale• Threats most likely to originate from a large manufacturer diversifying