1. Impacts prices and level of investment required to compete
2. Threat of Entry
   1. New Entrants
      1. New Capacity
      2. Hunger for Market Share
   2. Barriers to entry
      1. Supply-side economies of scale
      2. Demand-side benefits of scale
      3. Customer switching costs
      4. Capital requirements
      5. Incumbency advantages independent of size
      6. Unequal access to distribution channels
      7. Restrictive government policy
   3. Incumbent reaction
      1. retaliation
         1. Saber rattling
         2. Deep pockets
         3. Price war
         4. Fixed top line
3. Industry Rivals
   1. Forms
      1. Discounting
      2. New products
      3. Ad campaigns
      4. Service improvements
   2. Intensity of competition
      1. Numerous competitors or competitors roughly equal in size and power
      2. Industry growth is slow
      3. Exit barriers are high
      4. Rivals are highly committed to the business
      5. Firms cannot read each other's signals well
         1. Lack of familiarity with each other
         2. Diverse approaches to competing
         3. Differing goals
   3. Basis of Competition
      1. Price
         1. Products are nearly identical and buyer switching costs are low
         2. Fixed costs are high; marginal costs are low
         3. Capacity must be expanded in large increments to be efficient
      2. Non-price
         1. Product features
         2. Support services
         3. Delivery time
         4. Brand image
4. Supplier Leverage
   1. Capture a greater share of the value stream
      1. Charging more
      2. Limiting quality or service
      3. Shifting costs to industry participants
   2. A supplier has power IF
      1. It is more concentrated than the industry it sells to
      2. The supplier does not depend heavily on the target market for its revenues
      3. Buyer switching costs are high
      4. Products are differentiated
      5. There are no substitutes for the supplier's product or service
5. Customer Leverage
   1. Capture a greater share of the value stream
      1. Force down prices
      2. Demand better quality or service
      3. Competing among suppliers
   2. A customer has power IF
      1. Price sensitive
         1. Purchase goods or services are a significant fraction of cost structure or procurement budget
         2. Buyers are cash poor or under cost-cutting pressures
         3. Quality is not an issue
         4. Supplier's product has little effect on the buyer's other costs
      2. Negotiating Leverage
         1. Few buyers esp when capacity utilization is important to the seller
         2. Products are standardized/undifferentiated
         3. Switching costs are low
         4. Backwards integration in the value chain is a threat
6. Substitute Goods
   1. Something that performs the same or similar function by a different means
   2. Threat of substitute is high IF
      1. Substitute provides an attractive price-performance tradeoff
      2. Switching costs are low