Are there many entry barriers? High entry and low exit barriers makes for an attractive industry.The threat of new entrants canīe lowered or even blocked by the largest companies that have somewhat of a monopoly over the industry. If too many new entrants appear then profitability across the industry will be lowered and the attractiveness will decline. If an industry is perceived as attractive then of course new entrants are highly likely to appear. Do your competitors have more advertising resources?.Are you being innovative in order to give you the competitive advantage?.Do you have a solid competitive strategy in place?.So how do we as marketers assess the level of competitive intensity in our industry? Well Porter believes there are five factors, or five forces acting upon your organisation that will determine this (hence the name!) The Five Forces: Competitive Rivalry:Ĭlearly a key factor in competitive intensity will be competitive rivalry.
When we talk about industry attractiveness we are talking about the profitability of the industry not how much we like it! Porter believed that by understanding the level of competitive intensity, you could determine the attractiveness of that industry. As the name suggests, the concept was created by a fellow by the name of Michael E.
This one is used to assess the level of competitive intensity within your industry. Porter's five forces is another tool belonging to the marketer’s strategy toolkit. Visit our Marketing Theories Page to see more of our marketing buzzword busting blogs.
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