Five Fourth
Porter's five forces/five
competitive primary factors/five powers/five fourth analysis

The framework which is used the occasion where external environment (industry structure) is analyzed as the prerequisite which thinks of the competitive strategy of enterprise (or industry). Michael E porter (Michael E. Porter) of Harvard business college, our work "Competitive Strategy: Being something which with Techniques for Analyzing Industries and Competitors "(1980) is shown, it examines with five points of view of" new entry "" something "substitute" related to hostility "" buyer "" supplier ".

Newly joined enterprise
Threat

?
Supplier
Negotiation power
->
<- - - - +
+ - - - - - - ¦
¦
¦ Between existing competitive enterprise
Something related to hostility ¦
¦
¦ - - - - - - +
+ - - - ->
<-
Buyer
Negotiation power
?

Substitute service
Threat

Five powers(origin: "Of strategy" country competitive predominance "of competition")

*Threat of new entry
Size of threat of new entry is decided with height of the "barriers to entry". As barriers to entry, "" the industry product where economical efficiency of scale is shown "discrimination conversion is done", "when entering investment enormous" "", modification cost of the supplyer vendor (switching cost)"individual technology and the supplyer vendor, there is a profitable geographical and grant and a big experience curved line effect etc. difficult existing company" of government policy "when entering size of retaliation" "and so on you can list the guaranty of the enormous" at ", circulation channel".

*Hostility something with related to competitive enterprise inside industry
In the industry where competition is opposed extremely as for enterprise it becomes difficult, reduces the charm of industry to obtain excess profit. "" "Scale of the fellow trader and growth characteristic size" presence "of adjustment ability of number" all industries "of product/service discrimination conversion" "between competitive enterprise presence" "the strategy of the strategic difference" of fixed cost and stock cost "of production/supply" and size of size withdrawal barrier "of causal relation of the result" etc. can be listed as the primary factor which decides the opposition relationship of enterprise.

*Threat of substitute
It becomes threat appearance of another product - - substitute which satisfies the needs of the buyer for enterprise. When price efficiency ratio of the substitute is good, profit ratio of the industry which in addition offers the substitute is high, when the latent profit of present industry is reduced by the growth of the substitute and the like, you can say that threat is large.

*Threat of buyer
It is the existence where also the buyer who buys the product and service produces big effect (threat) on the respective company. Strength of influence is decided by the transaction negotiation power of the buyer. Negotiation power of the buyer is influenced "ratio" of presence "of the transaction the whole buying" of the number (concentration ratio) buyer of buyers "for" "buyer side profitability by of size" buyer "of modification cost of the supplyer vendor" of product/service discrimination conversion "/service the prejudice for the quality of product" and so on.

*Threat of supplier
Also threat of the supplier (seller) who is the supplyer vendor of the component and the commodity, is decided by the size of negotiation power of the seller. As for the determinant, "the number (concentration ratio)" for the seller the respective company of sellers "about which the importance?" "the necessity for product/service quality" ", size of modification cost of the supplyer vendor" and so on is.

*

The porter lists aforementioned 5 as a competitive state of the industry to which enterprise belongs and the key factor which decides structure of corporate profits, it pointed out that among those the strongest primary factor (threat) becomes the deciding factor. By the fact that industry (the inside and outside) is analyzed with this framework, you understood the structure of the industry where the respective company is placed, the most important primary factor of competition after specifying, you lectured about the fact that the competitive strategy is decided on the basis of "three basic strategies".