5 Forces - Toyota

INDUSTRY ANALYSIS

WORKSHEET ON THE ELEMENTS OF INDUSTRY STRUCTURE

An industry analysis is an important step in developing an appropriate strategy for a firm. To do the analysis properly, the analyst must take an objective perspective and look at the industry as a whole to identify the factors that are important to competitive success. The Five Forces Model, developed by Michael Porter, is one tool that can help identify important industry characteristics.

To apply the model to an industry of interest, answer the questions associated with each of the five forces that appear on the following pages. After looking at each force, and identifying the key factors within each, make a determination of the overall threat of the force. Having done this, you can then come back to the table below to determine the overall attractiveness of the industry and the Key Success Factors that must be addressed by the firms within the industry.

Overall Industry Rating:

| Favorable(not a threat to the industry) | Moderate | Unfavorable(a real threat tothe industry) |

Threat of New Entrants | | | |

Bargaining Power of Buyers | | | |

Bargaining Power of Suppliers | | | |

Threat of Substitutes | | | |

Intensity of Rivalry Among Competitors | | | |

KEY SUCCESS FACTORS:

THREAT OF NEW ENTRANTS

For the following questions, “yes” answers suggest possible barriers to entry while “no” answers indicate the lack of entry barriers. For each question, be sure to note the factors that lead you to either a “yes” or “no” answer and the likely strength or impact of these factors.

| Yes(+) | No(-) |

1. Do large firms within the industry have a cost or performance advantage? Established labor, automation, R&D, and patent history | Yes...