Five Force Model Factors and Strategy Intent in Business

1 - In the Five Force Model: Factors Influencing Existing Competition

1. The degree of existing rivalry - Determined by number of firms, relative size, degree of differentiation between firms, demand conditions, exit barriers.
2. Threat of potential entrants - Determined by attractiveness of industry, height of entry barriers (e.g., start-up costs, brand loyalty, regulation, etc.)
3. Bargaining power of suppliers -Determined by number of suppliers and their degree of differentiation, the portion of a firm's inputs obtained from a particular supplier, the portion of a supplier's sales sold to a particular firm, switching costs, and potential for vertical integration.
4. Bargaining power of buyers - Determined by number of buyers, the firm's degree of differentiation, the portion of a firm's inputs sold to a particular buyer, the portion of a buyer's purchases bought from a particular firm, switching costs, and potential for vertical integration.
5. Threat of substitutes - Determined by number of potential substitutes, their closeness in function and relative price.

2 - Factors Influencing the Bargaining Power of Suppliers

1. Number of suppliers and degree of differentiation
2. The portion of a firm's inputs obtained from a particular supplier
3. The portion of a supplier's sales sold to a particular firm
4. Switching costs
5. Potential for vertical integration

3 - First-Mover Advantages and Disadvantages

Advantages

1. Brand loyalty and technological leadership
2. Preemption of scarce assets
3. Exploiting buyer switching costs
4. Reaping increasing returns advantages.

Disadvantages

1. High research and development expenses
2. Undeveloped supply and distribution channels
3. Immature enabling technologies and complements
4. Uncertainty of customer requirements

4 - Reducing Entry Barriers for New Players

1. Technological change in markets - impact of disruptive technologies
2. Removal of statutory barriers - market liberalization
3. Globalization of market - increasing competition

5 - Qualitative Approach: Screening Questions

1. Role of customer - who is our target customer/how big the market/compatibility of ease of use for customers/distribution and pricing
2. Role of capabilities - existing competitors/future capabilities
3. Project time and cost - timing/cost factors

6 - Explaining the Concept of Strategy Intent

Strategic intent is a long-term goal that is ambitious, builds upon and stretches firm's core competencies, and draws from all levels of organization. Typically looks 10-20 years ahead, establish clear milestones.