I originally read Porter's 5 forces when at Uni and I digested the text with a loose understanding but it was only really when working in commercial business that I truly understood the deeper context and application of his work (and I now realise why the mature students on my course performed so well - they had real world experience to apply the theory to!). Anyway, that was a long time ago and so I assumed that Porter's relevance would diminish with time. However I recently re-read the factors that encourage increased threat of competitive entrants and in the Tech sector (with the potential exception of brand dominance) it is totally applicable today. I can't think of many authors whose work can stand the test of time as well as Porter's...
High Threat of entry of new competitors when: • Profitability does not require economies of scale • Products are undifferentiated • Brand names are not well-known • Initial capital investment is low • Consumer switching costs are low • Accessing distribution channels is easy • Location is not an issue • Proprietary technology is not an issue • Proprietary materials is not an issue • Government policy is not an issue • Expected retaliation of existing firms is not an issue
https://strategiccfo.com/threat-of-new-entrants-one-of-port
