Porter Airlines

1. Threat of New Entrants - The easier it is for new companies to enter the industry, the more cutthroat competition there will be. Factors that can limit the threat of new entrants are known as barriers to entry. Some examples include:

• Existing loyalty to major brands
• Incentives for using a particular buyer (such as frequent shopper programs)
• High fixed costs
• Scarcity of resources
• High costs of switching companies
• Government restrictions or legislation

Power of Suppliers - This is how much pressure suppliers can place on a business. If one supplier has a large enough impact to affect a company's margins and volumes, then it holds substantial power. Here are a few reasons that suppliers might have power:

• There are very few suppliers of a particular product
• There are no substitutes
• Switching to another (competitive) product is very costly
• The product is extremely important to buyers - can't do without it
• The supplying industry has a higher profitability than the buying industry

Power of Buyers - This is how much pressure customers can place on a business. If one customer has a large enough impact to affect a company's margins and volumes, then the customer hold substantial power. Here are a few reasons that customers might have power:

• Small number of buyers
• Purchases large volumes
• Switching to another (competitive) product is simple
• The product is not extremely important to buyers; they can do without the product for a period of time
• Customers are price sensitive

Availability of Substitutes - What is the likelihood that someone will switch to a competitive product or service? If the cost of switching is low, then this poses a serious threat. Here are a few factors that can affect the threat of substitutes:

• The main issue is the similarity of substitutes. For example, if the price of coffee rises substantially, a coffee drinker may switch over to a beverage like tea.
• If