Porter's Five Forces Model

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Buyer Power

• High-when buyers have many choices of whom to buy.
• Low-when their choices are few.
• Bests practices of IT-based
• Loyalty program in travel industry(e.g. rewards on free airline tickets or hotel stays)

Supplier Power

• High-when buyers have few choices of whom to buy from.
• Low-when their choices are many.

Threats of Substitute Products and Services

• High-when are many alternatives to a product or service
• Low-when there are few alternatives from which to choose
• An organization like to be on the market in which there are few substitutes of their product or services

E.g. Electronic product-same function different brands

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Threats of New Entrants

• High-when it is easy for new competitors to enter a market
• Low-when there are significant entry barriers to entering a market

Entry barriers is a product or service feature that customers have come to expect from organizations and must be offered by entering organization to compete and survive.

E.g. New bank must offers online paying bill, account monitoring to compete.

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Rivalry Among Existence Competitors

• High-when competition is fierce in a market 
• Low-when competition is more complacent

Existing competitors are not much of the threat: typically each firm has found its "niche"

Changes in management, ownership, or "the rules of the game"can give rise to serious threats to long term survival from existing firms.

E.g. Digi, Celcom, Maxis

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