Barriers of entry: including economies of scale, such as large-scale production required for automobile manufacturing to reduce costs, which is difficult for new companies to achieve in the short term; in industries with high product differentiation and high brand loyalty, new entrants need to invest a lot of resources to build brands; capital demand, aerospace The industry needs huge capital to invest in R&D and equipment purchase; convert costs, such as companies need to retrain employees and adjust business processes when replacing software systems; it is difficult to obtain sales channels, mature market sales channels are controlled by existing companies, and it is difficult for new companies to expand channels; the government Policy restrictions, such as strict access permits in the financial industry. Enterprises need to comprehensively evaluate these barriers and judge the possibility of new entrants.

Expected retaliation: The existing company's market position is stable, and new entrants may face retaliation methods such as price wars and advertising wars. If a new e-commerce platform enters the market, it may encounter counterattacks such as leading platforms reducing commodity prices and increasing advertising. New entrants need to estimate the possibility and intensity of retaliation in advance and formulate response strategies.

Substitution possibilities: Analyze the substitution of other products or services on the company's products, such as the impact of online conference software on traditional exhibition business. Technological advances and changes in consumer demand may lead to new alternatives. Enterprises need to continue to pay attention to industry trends and technical trends and plan ahead to respond to alternative risks.

Substitution cost: The cost required by consumers to replace alternatives, including purchase costs, usage costs, learning costs, etc. If you switch from a fuel vehicle to an electric vehicle, consumers need to consider the cost of car purchase prices, charging facilities construction, and changing driving habits. Enterprises can reduce consumers' willingness to change by reducing their product costs and improving cost-effectiveness.

Buyer concentration: A few large buyers have large purchase volumes and strong bargaining power for enterprises. For example, auto manufacturers can lower prices due to large purchase volume. Suppliers need to evaluate the buyer structure and formulate differentiated strategies for different types of buyers.

The degree of product standardization: product homogeneity is serious, buyers have many choices, and bargaining power is improved. For example, in the ordinary steel market, the products of each supplier are small, and the buyer has a lot of room for bargaining. Enterprises can improve their bargaining power through product differentiation and brand building.

The buyer's information mastery: The buyer has a sufficient understanding of product cost, market price and other information, and can better negotiate with the company. The popularization of the Internet makes it more convenient for consumers to obtain information and enhances their bargaining power. Enterprises should pay attention to information management and price reasonably to avoid the bargaining disadvantages caused by information asymmetry.

Supplier concentration: A few suppliers monopolize key resources and have strong bargaining power for enterprises. For example, in the field of chip manufacturing, a few companies have mastered core technologies and production capabilities, and have high bargaining power for downstream electronic equipment manufacturers. Enterprises need to expand supply channels and reduce their dependence on a single supplier.

Product uniqueness: Supplier products are unique and irreplaceable, and companies can only accept their prices and terms. For example, high-end lithography machine manufacturing companies have strong bargaining power over chip manufacturing companies due to their technology monopoly. Companies can increase R&D investment, seek alternatives, or establish strategic partnerships with suppliers.

Supplier forward integration capabilities: Suppliers have the ability to enter the industry where the company is located, posing a threat to the company. For example, large agricultural product suppliers are involved in the food processing industry and enhance their voice in the supply chain. Enterprises need to pay attention to supplier dynamics and plan ahead to respond to potential competition.

The degree of balance between number of competitors and strength: There are many companies in the industry and similar strengths, and the competition is fierce. For example, in the clothing industry, there are huge numbers of companies and market competition is fierce. Enterprises need to clarify their own advantages and positioning and formulate differentiated competitive strategies.

Industry growth rate: The industry is growing slowly, and competition among enterprises intensifies for limited market share. For example, in the traditional home appliance industry, the market is becoming saturated, and companies compete for consumers through price wars, marketing wars, etc. Enterprises can explore new markets, innovate products or services, and find new growth points.

The degree of product differentiation: Product homogeneity is serious, and corporate competition mainly relies on price and promotional methods. For example, in the bottled water market, there are small product differences, and companies attract consumers through advertising and price strategies. Enterprises should pay attention to product innovation and brand building to enhance product added value.

Fixed cost ratio: In industries with high fixed costs, enterprises need to maintain high output in order to share costs, which is prone to trigger price competition. For example, airlines have high aircraft purchase and operation costs, and often increase passenger occupancy rates through low-priced promotions. Enterprises need to optimize their cost structure, improve operational efficiency, and set reasonable pricing.

Low entry barrier: The overall entry threshold is not high, and there are few restrictions on capital, technology, policies, etc., which enables many companies to easily enter. For example, a small catering company can open a business by renting a store and recruiting a few employees. Low entry barriers lead to fierce market competition, and enterprises need to quickly establish competitive advantages.

Lack of economies of scale or experience curve: It is difficult for a company to reduce costs by expanding its scale, or as output increases, the cost reduction is not obvious. For example, handicraft production is mostly manual production, making it difficult to achieve large-scale efficient production. Enterprises can respond through personalized customization and increasing product added value.

High transportation costs: Product transportation costs account for a large proportion, limiting the coverage of the enterprise's market. For example, building materials such as sand and gravel are high in transportation costs, and enterprises can only sell them locally and surrounding areas. Enterprises can optimize logistics and distribution, or cooperate with local companies to reduce costs.

High inventory costs and large sales fluctuations: high product storage costs and unstable market demand, making it difficult for companies to maintain large-scale inventory. For example, the cost of preservation of flowers is high, and demand fluctuates greatly during special periods such as festivals. Enterprises need to optimize inventory management, use big data to predict demand, and reduce inventory risks.

Create economies of scale or experience curve: expand the scale of enterprises through chain operations, mergers and acquisitions, and realize resource sharing and optimized allocation. For example, fast food brands such as KFC and McDonald's are operated in a chain manner to uniformly purchase, distribution and management to reduce costs. Enterprises can formulate expansion strategies and gradually establish scale advantages.

Standardize diversified market demand: analyze and integrate market demand, develop standardized products or services, and improve production and operational efficiency. For example, economical hotels provide standardized rooms and services for the basic accommodation needs of business and tourism travelers. Enterprises need to conduct in-depth research on the market, find out the commonalities of demand, and formulate standardized plans.

Focus on specific market segments: focus on a specific customer group, product type or geographical area to form differentiated competitive advantages. For example, shops focusing on pet grooming provide services to pet owners’ specific needs for pet care. Enterprises need to accurately position the target market, deeply understand customer needs, and provide targeted services.

Technology uncertainty: The industry is in the early stages of development, technology is not yet mature, and multiple technical routes coexist, making it difficult for companies to determine which technology will become the mainstream. For example, in the new energy vehicle industry, battery technology has multiple routes, including lithium batteries, hydrogen fuel cells, etc., and the future development direction has not yet been clarified. Enterprises need to increase R&D investment, track technical trends, and make good technical reserves.

Strategy uncertainty: Companies lack understanding of market demand, competitive landscape, profit model, etc., and lack mature strategies for reference. For example, when the sharing economy first emerged, companies were in the exploratory stage of issues such as how to make profits, how to expand the market, and how to manage operations. Enterprises need to gradually clarify their strategic direction through market research, pilot operations and other methods.

The initial cost drops rapidly after high: large R&D investment and small production scale lead to high initial costs, but with technological progress and scale expansion, the cost drops rapidly. For example, the early solar photovoltaic power generation equipment had high production costs, and with the development of technology and the expansion of industrial scale, the cost dropped significantly. Enterprises need to plan funds reasonably and survive the initial cost pressure stage.

Access to proprietary technology: Enterprises need to master core technologies in order to gain a foothold in the industry. For example, semiconductor chip manufacturing, enterprises need to have advanced chip design and manufacturing technology. Enterprises can obtain technology through independent research and development, cooperative research and development, technology mergers and acquisitions, etc.

Distribution channel development: Establish effective product or service sales channels to ensure that the products can reach consumers. For example, emerging electronic products need to establish cooperative relationships with e-commerce platforms and offline retailers. Enterprises need to formulate channel strategies, select appropriate partners, and expand sales channels.

Guarantee of raw materials and input factors: Ensure the stable supply of key raw materials and production factors. For example, rare earths are widely used in electronics, new energy and other industries, and related enterprises need to ensure the stable supply of rare earths. Enterprises can establish long-term cooperative relationships with suppliers, or invest in upstream resource enterprises to ensure supply safety.

Problems with supply of raw materials or production components: There may be shortage of supply of special raw materials or parts required in emerging industries, affecting enterprise production. For example, in the new energy vehicle industry, the supply of key raw materials such as lithium and cobalt is tight, which restricts the development of enterprises. Enterprises need to make arrangements in advance, sign long-term contracts with suppliers, or find alternative materials.

Incomplete infrastructure: lack of supporting infrastructure, restricting product or service promotion. If the number of charging piles is insufficient, it will affect the popularity of electric vehicles. Enterprises can join forces with industry forces to promote infrastructure construction or provide supporting solutions.

Missing product or technical standards: There is no unified standard in the industry, resulting in product compatibility, quality and other problems. For example, in the early smart home industry, products from various brands were unable to be interconnected, which affected the user experience. Enterprises can participate in the formulation of industry standards to enhance product competitiveness.

Low consumer awareness and acceptance: Consumers do not understand emerging products or services and are on the wait-and-see attitude. For example, when the virtual reality technology product was first launched, consumers lacked awareness of its functions and application scenarios and had low willingness to purchase. Enterprises need to strengthen marketing, enhance consumer awareness, and increase acceptance through experiential marketing and other methods.

Construction of efficient production facilities: invest funds to build advanced and large-scale production facilities, improve production efficiency, and reduce unit production costs. For example, in the field of electronic product manufacturing, Foxconn improves production efficiency and reduces costs by building large-scale and automated production lines. Enterprises need to make investment plans and choose appropriate production technologies and equipment.

Construction of a cost control system: comprehensively control costs, including negotiating with suppliers to strive for low prices, optimizing the production process and reducing waste, streamlining the sales process and reducing sales expenses, etc. For example, Walmart has established long-term cooperative relationships with suppliers to reduce procurement costs; optimizes the logistics distribution system and reduces logistics costs. Enterprises need to establish a complete cost control system to clarify the cost control goals and responsibilities of each link.

Risk of technological change: Industry technology is developing rapidly, and enterprises' early investment in production equipment, processes, etc. may fail due to the emergence of new technologies. For example, Kodak in the era of film cameras, due to the rise of digital technology, its large-scale investment in film production equipment became a sunk cost. Enterprises need to continue to pay attention to technological development and update equipment and processes in a timely manner.

Learning curve risk: New companies may gain similar production technology and management experience at lower costs by learning to imitate, weakening their cost advantages. For example, some emerging electronics manufacturing companies quickly reduce costs by learning from the production management experience of industry-leading companies. Enterprises need to continue to innovate, maintain their leading position, and increase the difficulty of imitation.

Ignore other strategic factors risks: Enterprises pay too much attention to cost control, and may ignore product quality improvement, technological innovation, customer service improvement, etc., resulting in a decline in product competitiveness. For example, some clothing companies that compete at low prices have gradually lost their market share due to product quality issues. Enterprises need to balance costs with other strategic elements to ensure the comprehensive competitiveness of products.

Product differentiation: form uniqueness in product design, function, quality, etc. For example, Apple phones are different from other brand phones with its simple and beautiful design and powerful system functions. Enterprises need to invest R&D resources, pay attention to user needs and market trends, and create unique products.

Service differentiation: Provide high-quality and unique pre-sales, in-sales and after-sales services. For example, Haidilao stands out in the catering industry with its considerate and thoughtful service, including free snacks when queuing, manicure services, and personalized care when dining. Enterprises need to train employees, establish service standards, and continuously optimize service processes.

Brand image differentiation: shaping a unique brand image and culture to attract consumers. For example, Coca-Cola has created a vibrant and joyful brand image through advertising, sponsorship activities, etc., and forms a differentiated competition with Pepsi. Enterprises need to formulate brand strategies and spread their brand image through advertising, public relations and other means.

The problem of balancing market share and differentiation: The pursuit of differentiation may lead to high product prices, limiting the scope of the target customer group, and it is difficult to achieve high market share at the same time. For example, luxury brands have relatively limited market share due to their high prices. Enterprises need to clarify the target customer group, price reasonably, and balance differentiation with market share.

The cost of differentiation is high: In order to achieve differentiation, enterprises need to invest a lot of money in R&D, design, marketing, etc. to increase operating costs. For example, Tesla has invested huge amounts of money in electric vehicle research and development and autonomous driving technology research and development to achieve product differentiation. Enterprises need to evaluate differentiated input-output ratios to ensure the sustainability of differentiated strategies.

Risk of changing consumer demand: Consumer preferences may change over time, and the differentiated advantages of corporate early investment may no longer be recognized. For example, the once popular flip phones have disappeared as consumers prefer large-screen straight-board mobile phones. Enterprises need to continue to pay attention to changes in consumer demand and adjust differentiated strategies in a timely manner.

Understand the needs of target customers: The company focuses on specific market segments, can more accurately grasp the characteristics and changing trends of customer needs, and provide targeted products or services. For example, a photo studio that focuses on children's photography can better understand the special needs of children and parents for photography services. Enterprises need to establish customer feedback mechanisms and continuously optimize products and services.

Efficient resource allocation: concentrate resource investment and form competitive advantages in specific fields. If you focus on logistics companies in a certain region, you can establish a more dense distribution network in that region to improve distribution efficiency. Enterprises need to plan resources reasonably to improve resource utilization efficiency.

Form entry barriers: Establish brand loyalty and professional image in the segmented markets, and form barriers for potential entrants. For example, a company focusing on software research and development in a certain professional field will find it difficult for new companies to enter this market segment with its professional technology and customer resources. Enterprises need to strengthen brand building, enhance professional image, and consolidate their market position.

Basic activities: including internal logistics, such as the reception, storage and distribution of raw materials; production operations, converting investment into final products; external logistics, storage and distribution of products; marketing, promoting product sales; service, providing after-sales support to customers. For example, automobile manufacturing companies, internal logistics involves the procurement and warehousing of parts, production operations are the process of automobile assembly, external logistics are responsible for the transportation of finished vehicles, marketing promotes products through advertising, auto shows, etc., and services include after-sales maintenance. Enterprises need to optimize various basic activity processes and improve operational efficiency.

Support activities: cover procurement, obtaining resources required for production; technology development, improving products and processes; human resources management, recruiting, training and motivating employees; corporate infrastructure, including financial, administrative and other support systems. For example, technology companies purchase key electronic components, invest in the research and development of new chip technologies, recruit outstanding engineers in human resources management, and financial management and administrative management for the daily operation of corporate infrastructure. Enterprises need to coordinate various support activities to provide strong support for basic activities.

Primary production factors: natural resources, climate, geographical location, non-skilled workers, etc. For example, the Middle East has inherent advantages in the oil industry due to its abundant oil resources. Enterprises need to make rational use of primary production factors or reduce their dependence on them through technological innovation.

Advanced production factors: modern infrastructure such as communications, information, and transportation, and manpower and research institutions with higher education. For example, the United States' leading position in the information technology industry is due to its advanced scientific research institutions and a large number of high-quality talents. Enterprises need to increase investment in advanced production factors and enhance core competitiveness.