Financial, Management and Company Analysis NBC Universal -Porter Five Forces Analysis
1. Threat of new entrants. If the cost of getting into an industry is high enough, new competitors won't be able to get a foothold. Raise the barriers to entry and you secure the industry's profits.
2. Rivalry among existing competitors. The more the industry's revenues are concentrated among a small number of big suppliers, the easier it is to raise prices with impunity.
3. Bargaining power of customers. If your customers don't have other options to get the service you sell, you can tell them the price they have to pay and they can either take it or get no service.
4. Bargaining power of suppliers. If you need to buy supplies to offer your service, you may have to give away too much of your revenues to those suppliers. But if you make some of the supplies yourself and you buy more of the suppliers' production, you can negotiate a better price.
5. Threat of substitute services. If an upstart can develop a better service at a lower price, customers will flock to that substitute. If you want to block the threat of substitutes, you can copy its service or cut off its oxygen supply."