Risk of Entry by Potential Competitors. The threat of new entrants is usually based on the market entry barriers .

the threat is low in this point because when the companies want to enter the education sector they need more time to do the Economies of scale and Brand loyalty. The government regulations one of the most barriers that prevent the companies enter the education sector. This makes to me good opportunity to earn more profit. Existing competitors. The existing competitors make a big threat because the universities are interdependent so each university affects the other. Bargaining Power of Buyers. The threat of buyers is low because the switching costs for the students are low and the students can't threaten to enter as a competitor and the buyers are not dominant. Bargaining ower of !uppliers. The threat in this point is very high because the suppler knows that " can't threaten to enter the suppliers industry and some time " can't find the substitutes or " can find few substitutes. The switching costs from the suppliers are significant. !ubstitute roducts. The threat is low because " can find many substitutes for many products and this make me have more opportunity to gain more profits. orter's #ive #orces $odel simply outlines the five most important factors taking place and shaping an industry in order to determine it's attractiveness for new entrants% or as a means to shape strategy for competitors within the industry. They are& Bargaining ower of Buyers. Example ' #ew buyers means they may have more say over final product pricing. Bargaining ower of !upplier. Ex ' $any suppliers of the same product in a region (!teel% for example) would typically mean firms en*oy lower purchase prices on these inputs. Threat of !ubstitutes. Ex ' "f you make a grain based cereal% you are pitting it against not only other grain based cereals% but other grain based% or +healthy+ style breakfasts. The Threat of substitutes is high. Threat of ,ew Entrants. Ex - "s t easy for competitors to enter your industry because of& low startup costs% few existing competitors in a large market% easy to understand.use product/ 01% s it a challenge because of the difficult nature of the business (example& diamond exploration% which is both difficult and cost prohibitive) "ntensity of 2ompetition. Ex ' 3re there a lot of players a in small market ("ntense) or very few players in a large market (,ot intense). Those are orter's #ive #orces.

Definition of 'Porter's 5 Forces' ,amed after $ichael E. orter% this model identifies and analy4es 5 competitive forces that shape every industry% and helps determine an industry's weaknesses and strengths. 6. 2ompetition in the industry 7. otential of new entrants into industry 8. ower of suppliers 9. ower of customers 5. Threat of substitute products

Porters Fi e Forces of Competiti e Position !nalysis "#at is it$ Framework%t#eory orter's #ive #orces of 2ompetitive osition 3nalysis were developed in 6:;: by $ichael E orter of <arvard Business !chool as a simple framework for assessing and evaluating the competitive strength and position of a business organisation. This theory is based on the concept that there are five forces that determine the competitive intensity and attractiveness of a market. orter=s five forces help to identify where power lies in a business situation. This is useful both in understanding the strength of an organisation=s current competitive position% and the strength of a position that an organisation may look to move into. !trategic analysts often use orter=s five forces to understand whether new products or services are potentially profitable. By understanding where power lies% the theory can also be used to identify areas of strength% to improve weaknesses and to avoid mistakes. Porters fi e forces of competiti e position analysis&

The five forces are& '. (upplier power. 3n assessment of how easy it is for suppliers to drive up prices. This is driven by the& number of suppliers of each essential input> uni?ueness of their product or service> relative si4e and strength of the supplier> and cost of switching from one supplier to another. ). Buyer power. 3n assessment of how easy it is for buyers to drive prices down. This is driven by the& number of buyers in the market> importance of each individual buyer to the organisation> and cost to the buyer of switching from one supplier to another. "f a business has *ust a few powerful buyers% they are often able to dictate terms. *. Competiti e ri alry. The main driver is the number and capability of competitors in the market. $any competitors% offering undifferentiated products and services% will reduce market attractiveness. +. ,#reat of substitution. @here close substitute products exist in a market% it increases the likelihood of customers switching to alternatives in response to price increases. This reduces both the power of suppliers and the attractiveness of the market. 5. ,#reat of new entry. rofitable markets attract new entrants% which erodes profitability. Anless incumbents have strong and durable barriers to entry% for example% patents% economies of scale% capital re?uirements or government policies% then profitability will decline to a competitive rate. 3rguably% regulation% taxation and trade policies make government a sixth force for many industries.

3s part of my continuing series on the BBig Cata $B3D% "=d like to introduce a second business valuation techni?ue. $y last blog% BBig Cata $B3& 2ourse 6E63%D covered the use of the BBig Cata @orksheetD as a business valuation techni?ue to help your line of business (F0B) users envision where and how big data analytics can impact the types of ?uestions they can ask% and the types of decisions they can make. $y Big Cata @orksheet is ideal for organi4ations that already understand what business initiative they want to target% and are trying to ?uantify how big data could impact that initiative. This second business valuation techni?ue assumes that have you not yet identified what business initiative you want to target. This techni?ue will help you explore the realm of the possible with respect to what key business initiatives your organi4ation could target. Big Cata $B3 2urriculum ,o $B3 course would be complete without some re?uired reading from $ichael orter% the dean of business strategy. $ichael orter wrote the definitive books on corporate strategies% B2ompetitive !trategyD (6:GE) and B2ompetitive 3dvantageD (6:G5). The competitive insights and guidance provided in those books are as relevant today as they were in the GE=s% and provide a foundation upon which to envision the potential business functions% and related business benefits% that could be impacted by big data analytics. $ichael orter=s #ive #orces 3nalysis Cefinition Taken from @ikipedia=s definition of $ichael orter=s #ive #orces 3nalysis& B orter=s five forces analysis is a framework for industry analysis and business strategy development formed by $ichael E. orter of <arvard Business !chool in 6:;:. "t draws upon industrial organi4ation economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. 3ttractiveness in this context refers to the overall industry profitability. 3n BunattractiveD industry is one in which the combination of these five forces acts to drive down overall profitability. 3 very unattractive industry would be one approaching Bpure competitionD% in which available profits for all firms are driven to normal profit.D The #ive #orces analysis provides an industry perspective on competitive drivers across 2ompetitive 1ivalry% !upplier ower% Buyer ower% roduct.Technology Cevelopment% and ,ew $arket Entrants (see #igure 6 below). @e will use this Boutside'inD perspective to identify where and how big data analytics could impact an organi4ation=s ability to change the dynamics of their market place. #igure 6& $ichael E. orter B2ompetitive !trategy& Techni?ues for 3naly4ing "ndustries and 2ompetitorsD orter=s #ive #orces 3nalysis Example Fet=s say that you are in the on'line retail business and are looking to Boptimi4e your merchandising effectivenessD to foster industry change and derive competitive advantage. @e can use the #ive #orces model to understand how big data analytics could be applied to merchandising optimi4ation to impact your organi4ation=s overall industry positioning and competitiveness. "n the area of 2ompetitive 1ivalry% you could apply big data analytics to your $erchandising 0ptimi4ation initiative to derive competitive advantage in the following ways&

Ase cross'media 2onversion 3ttribution 3nalysis across search% display% social% and mobile advertising to outflank competition on cross'channel pricing% placement% and promotional effectiveness Feverage 3.B Testing to uncover merchandising messaging and placement insights that drive category market share growth and increased shopping occurrence profitability "n the area of Buyer ower% you could apply big data analytics to your $erchandising 0ptimi4ation initiative to uncover uni?ue market% product% and customer insights to counter the growing power of buyers and buying coalitions% including& Feverage !entiment 3nalysis from social media sites to identify and ?uantify micro' population merchandising trends and insights to improve customer segmentation% targeting% pricing% and packaging effectiveness Feverage real'time customer sales and engagement data to optimi4e in'flight merchandise targeting to increase on'site customer moneti4ation (e.g.% increase conversion rates% increase up'sell and cross'sell effectiveness) Feverage merchandising 1ecommendation Engines to improve the customer experience (e.g.% net promoter scores% repeat purchases% loyalty)% optimi4e merchandising margins and minimi4e merchandising markdowns "n the area of !upplier ower% you could apply big data analytics to your $erchandising 0ptimi4ation initiative to glean uni?ue market% product and customer insights to counter the growing power of suppliers% including& Feverage detailed point'of'sale ( 0!) and 1#"C data to identify BhotD products more ?uickly than competitors in order to Block inD supplier inventories and favorable terms and conditions Feverage detailed 0! and 1#"C data to cancel and.or return slow movers and no movers faster than competition in order to minimi4e merchandise markdown and inventory carrying costs "n the area of roduct and Technology "nnovation% you could apply big data analytics to your $erchandising 0ptimi4ation initiative to identify areas where products and.or technology can be used to drive buyer or supplier lock'in% or create barriers of entry for new market entrants% including& rovide a software'as'a service dashboard and predictive analytics platform that leverages merchandising data and insights to help suppliers minimi4e their procurement% inventory and distribution costs 2ouple merchandising data and insights with predictive analytics capabilities that recommends in'flight supply chain and inventory ad*ustments to your key channel and distribution partners "n the area of ,ew $arket Entrants% you could use big data analytics to identify and pre'empt market opportunities before new market entrants can gain a foothold% including& 2onstantly monitor social media and mobile data for merchandising trending insights that can be used to pre'empt new market entrants orter=s #ive #orces 3nalysis and the Big Cata $B3

0ne of the biggest big data analytics challenges is the possibility of your big data analytics initiative morphing into a science pro*ect. That=s when a small priesthood of analytics experts plays with the data and technology capabilities% but the business benefits and the industry changing impact are never reali4ed by the business uses and executives. The orter #ive #orces 3nalysis provides a business'centric approach to looking at the potential of your big data analytics initiative from the framework of how it could impact the forces and players that define your marketplace. This Boutside'inD business valuation techni?ue facilitates collaboration with your F0B stakeholders to help them to envision the realm of the possible% and gain early buy'in to support the organi4ation=s big data analytics initiative. $y next blog will cover a more traditional internal business valuation framework - Halue 2hain 3nalysis. "n the meantime% dig out those old $ichael orter books and let=s get started with your Big Cata $B3I

"f you are at the Jartner B" !ummit in Fos 3ngeles% feel free to stop by the E$2 booth or *oin me at my speaking session on 3pril 8rd at 8pm. "=ll discuss how companies we work with are leveraging big data and give you some tips on how to do it in your organi4ation.