According to Michael Porter, the primary competitive forces are:
- The threats of new market players
- The threat of substitute products or services
- Power of suppliers
- Power of customers
- Industry rivalry
1. The threats of new market players:
- It is the threat that corresponds to the growth of a certain market, its profitability and differentiation of your product or service in relation to competitors.
2.The threat of substitute products or services:
- It is the analysis of products that partially or totally replace your product or service and cause your market share to decrease.
3. Power of suppliers:
- It occurs when suppliers have a monopoly on the market and dictate market rules, defining prices and terms.
4. Power of customers:
- When the customer is able to negotiate prices and terms with a company, as in a segment with many suppliers and few customers.
5. Industry rivalry
- The level of competition between a market that has several competitors, which will lead companies to develop competitive advantages to conquer a larger market share.
Therefore, these are Porter's 5 forces, that is, it is a methodology that aims to analyze the level of competitiveness in the market, relationship and impact on a business, helping a company to understand its strengths and weaknesses to become competitive and profitable in the long run.
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