Example Porter’s Five Forces Model: FTA TV

Here is an example of applying Porter’s five forces industry model to the fast food industry. It is designed as a helpful thought starter for your further analysis.

Porter’s Five Forces Analysis of the Free-to-Air TV Industry

1. Threat of New Entrants:

  • High capital requirements for starting a new free-to-air TV network, including infrastructure and licensing.
  • The need for strong content to attract viewers can be a significant barrier.
  • Regulatory barriers and spectrum availability may limit new entrants.
  • Established networks have strong brand recognition and loyal audiences.
  • Advancements in technology could lower some barriers, like the rise of digital platforms.

2. Bargaining Power of Suppliers:

  • Content creators and rights holders have significant power, especially for popular or exclusive content.
  • High competition among networks for quality content can increase prices.
  • Technological equipment suppliers have moderate power due to the specialized nature of broadcasting equipment.
  • Availability of alternative content sources, like user-generated content, may reduce some power.
  • Dependence on advertising revenue gives advertisers considerable influence.

3. Bargaining Power of Buyers:

  • Viewers have high bargaining power due to a wide array of free and paid content available, especially online.
  • Changing viewer preferences and the shift towards on-demand content challenge traditional TV models.
  • Advertisers also have high bargaining power, as they can choose from various platforms to allocate their budget.
  • Viewer data and analytics are becoming increasingly important for attracting advertisers.
  • The trend towards targeted and digital advertising impacts TV advertising revenue.

4. Threat of Substitute Products:

  • High threat from online streaming services, social media, and video platforms.
  • Availability of alternative entertainment and information sources like podcasts and blogs.
  • The growing trend of ‘cord-cutting’ where viewers switch to internet-based services.
  • Mobile devices and laptops are increasingly used for media consumption.
  • Free-to-air TV competes with cable, satellite, and pay-TV services.

5. Competitive Rivalry within the Industry:

  • Intense rivalry among existing free-to-air networks for viewers and advertising dollars.
  • Competition for high-quality content and talent.
  • Need for continuous innovation in programming and technology to retain viewers.
  • Pressure to diversify revenue streams, such as through digital platforms.
  • Globalization of content increases competition from international networks.

Sources and External Reading

  • The Five Forces – Michael Porter – An overview of the Five Forces framework by Michael Porter, explaining its importance in understanding competitive forces in an industry.
  • The Five Forces Framework – Harvard Business Publishing Education – Harvard Business Publishing provides a collection of materials for teaching about the Five Forces, including simulations.
  • The Five Competitive Forces That Shape Strategy – Harvard Business School’s detailed article on how competitive forces shape strategy, based on Michael Porter’s original work.
  • Porter’s Five Forces – Research Guides at Baruch College – A resource guide from Baruch College on Porter’s Five Forces, including its application in industry analysis and strategy formulation.
  • Porter’s Five Forces – Business Research — Industry Analysis – UCF Libraries – University of Central Florida’s guide on Porter’s Five Forces, offering insights into the model and its application in industry analysis.
Scroll to Top