Michael Porter's five forces model is an analysis tool that uses five industry forces to determine the intensity of competition in an industry and its profitability level which has turned into one of the most popular and

This force determines the ease of new entrants to enter a particular industry. If an industry is profitable and there are hardly any barriers to enter, competition intensifies rapidly. Therefore, with the entry of more rivals, firms begin to compete for the fixed market share, profits start to decline. Hence, it is critical for existing organizations in the industry to build high barriers to enter to discourage new entrants. Threat of new entrants is high when: Smaller capital is required to make an entry; Existing companies are not influential/dominant to prevent new entrants; Existing firms do not have patents, trademarks or do not strong brand value; There is no/little government regulation; Customer switching costs are low; There is low customer loyalty; Products are not being able to be differentiated; and Economies of scale can be effortlessly acquired.