00:01
In order to apply porter's five forces, we have to first understand what porter's five forces are.
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And so porter's five forces is a model that identifies and analyzes five competitive forces that shape every industry.
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It also helps determine in industry's weaknesses and strength.
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So what are these five forces? one, competition in the industry.
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You need to know who your competition is.
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Two, potential of new entrance into the industry.
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In other words, is it easy for competitors, new competitors to enter the market or is it difficult? if it's costly, it's harder for them to enter the market and you're not going to be faced with as many new entrants.
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But if it's affordable and there's a market for it, you're going to have new entrants into the market and you need to be aware of that.
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Three, power of suppliers.
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Are you reliant on a lot of outside sources? to make your product.
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If so, your suppliers have more power than if you don't have a lot of outside sources.
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For the power of customers...