FIVE FORCES ANALYSIS: Paypal

Focus on the industry environment (i.e., on the nature of competition, buyers, and suppliers in this industry).

Discuss the five (5) competitive forces for this firms INDUSTRY. Use relevant facts (research!) to support your arguments. Make sure that you start your discussion of the force by stating whether it is weak or strong. Then explain your reasoning as to why you think so using course content (book and my slides) and data (that you have collected through your research). For example, when you are discussing risk of entry, be aware that you should be talking about entry barriers (i.e., brand loyalty, economies of scale, absolute cost advantages etc. see my slides). You should look at the data you have collected, and try to find evidence (i.e., numbers or articles), which suggests the presence or lack of brand loyalty, economies of scale, etc. Finally, conclude the discussion of the force by stating whether it works toward increasing or decreasing profitability in the industry. Remember, five force analysis is an analysis of the industrys environment. It looks at whether it is easy or difficult for firms (with an S) within this industry to increase or sustain their profitability.