Porter’s Five Forces of Industry Competitiveness

2. Porter’s Five Forces of Industry Competitiveness Rivalry Determinants: Concentration and Balance Growth Intermittent Overcapacity Product Differences Exit Barriers Etc… Substitution Threat: Relative Price Performance Switching Costs Buyer Propensity Etc… Threat of Substitution Supplier Power Industry Rivalry Buyer Power Supplier Power: Supplier Concentration Differentiation of inputs Switching Costs Importance of Volume Ability to Forward Integrate Etc… Buyer Power: Buyer Concentration Buyer Volume Buyer Switching Costs Ability to Backward Integrate Price Sensitivity Etc… Threat of New Entrants Entry Barriers: Economies of Scale Capital Requirements Access to Distribution Etc… T. Smith, Forest Products Consolidation, May 2001

3. Five Forces of Industry Competitiveness (Supply Chain) Manufacturer G-P L-P J.M. Huber Phenix Biocomposits Channel Member Home Depot Carolina Holdings Cameron Ashley Georgia Pacific End-User/Customer DIY Customer Pulte Homes Herman Miller Raw Material Supplier Timber Resins Etc… Subs. Threat Subs. Threat Buyer Power Supplier Power I/R (Mnfr.) I/R (Dist.) Buyer Power Supplier Power New Entrants New Entrants T. Smith, Forest Products Consolidation, May 2001

4. Bargaining Power of Suppliers

5. Bargaining Power of Buyers

6. Threat of New Entrants

7. Threat of Substitutes

8. Rivalry Among Competitors