FACILITIES AND ENGINEERING SERVICES IN 2024: THE MARKET OUTLOOK AND COMMERCIAL TRENDS

Search
Close this search box.

Guarding Against Disruption – Porter’s Five Forces

Baskar Sundaram

Guarding Against Disruption

Day 14: Porter’s Five Forces

In this article, we are exploring Porter’s Five Forces, a framework that measures the competitive potential of a business. Each of the five forces helps determine the potential profitability of any business, in any market. Let’s learn how to apply Porter’s Five Forces.

About Porter's Five Forces

First developed in 1979, Porter’s Five Forces is an evergreen strategic framework that measures the competitive potential of a business. The five forces are:

Competitive Rivalry: measures the quantity and quality of competitors. The higher the degree of competition, the more difficult it is for any organization to be successful.

 

Supplier Power: in many industries, suppliers have significant bargaining power, which enables them to charge higher prices for raw materials, goods, and services, hampering profitability.

 

Buyer Power: considers the amount of leverage that buyers possess. Buyers have significant bargaining power when they have many alternatives and represent a good portion of the organization’s revenue, and comparably less power when their switching costs are high.

 

Threat of Substitution: substitutes are products that use different technologies to solve the same need e.g. a train vs. a plane. The threat of substitutes is primarily dictated by both the availability of substitutes and the switching costs associated with using a substitute product.

 

Threat of New Entrants: new entrants are disruptors that change industries. If barriers to entry are high, as in the pharmaceutical industry, then the threat of new entrants is lower. If there are minimal barriers to entry, as there are for many service businesses, the threat is high.

Recent Post

Best ERP Software for Real Estate Companies in the UK

Discover how generative AI can revolutionise facilities management, optimise operations, and reduce costs. This practical guide provides CXOs with a step-by-step approach to implementing AI-driven solutions, backed by real-world data and expert insights. Learn how to assess your current practices, select the right AI solution, and measure success in energy management, predictive maintenance, and space utilisation.

1. The Business Case for Generative AI in FM
2. Step 1: Assess Your Current Energy Management Practices
3. Step 2: Select an AI-Driven Energy Management Solution
4. Step 3: Implement and Optimise Your AI Solution
5. Step 4: Measure and Communicate Your Success
6. Embarking on Your Generative AI Journey

Read More »
>
Share This

Free UK FM Market Summary Report January 2024

Gain the edge in the UK Facility Management industry with our concise report. Arm yourself with cutting-edge market insights and data-driven forecasts.

Master the UK FM Market with a single click.