Explain porters five force model with example.

Question

Accepted Answer

Porter's Five Forces is a framework for analyzing the competitive forces in an industry.

Threat of new entrants
Bargaining power of suppliers
Bargaining power of buyers
Threat of substitute products or services
Rivalry among existing competitors
Example: The airline industry
- Threat of new entrants: High capital requirements and government regulations make it difficult for new airlines to enter the market.
- Bargaining power of suppliers: Aircraft manufacturers have significant bargaining power over airlines due to the limited number of suppliers.
- Bargaining power of buyers: Large corporations and travel agencies have significant bargaining power over airlines due to their ability to negotiate lower prices.
- Threat of substitute products or services: High-speed trains and buses are potential substitutes for short-haul flights.
- Rivalry among existing competitors: Airlines compete fiercely on price, routes, and customer service.

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