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As an employee of John Deere I chose the farm and heavy construction machinery industry.

Industry competition – There is a lot of competition in this market with the top companies ie Deere, Caterpillar, Case NH, AGO to list a few. There are a lot of similarities between the companies but each one has their list of items they excel at that keeps customers purchasing their equipment.
Bargaining power of buyers – I believe the bargaining power of buyers in this industry is low. Buyers certainly have many options but when looking at the top companies and what they offer it is very difficult for a buyer to get something cheaper that stands up to the top companies. Many of the companies in this industry have customer programs that can help with the cost of the product but is also a loyalty to the company.
Bargaining power of suppliers – The bargaining power of suppliers in this industry, depending on the component can be low to high. If you are talking about a simple sheet metal part, there are many companies that supply those type of parts which gives the purchasing company the upper hand. When it comes to parts like castings, tires, and engine components there are fewer suppliers and that is where the supplier would have the upper hand.
Threat of substitution – I believe the threat of substitution is low in this industry. There are other ways to farm thousands of acres or land or clear land for buildings.
Threat of entry – The threat of new entry is low. Over the last 5-10 years several companies have entered the industry and not been a threat or even lasted to take market share from the top competitors. I know Deere has even purchased some of the companies in markets where they were trying to improve their own product.
Easton, P.D., Wild, J.J., Halsey, R.F, and McAnally, M. L. (2021). Financial Accounting for MBAs (8th ed.). Westmont, IL: Cambridge Business Publishers, LLC. (1-22)

Lecture material

List of Stocks For An Industry (stockmarketmba.com)

Example 2:(Dont Copy Paste)-Use as reference

The Porter’s Five Forces Model can be utilized to determine the competitive intensity of an industry. These five forces are: industry competition, bargaining power of buyers, bargaining power of suppliers, threat of substitution, and threat of entry. Having been in the life insurance industry for nearly 20 years, it’s one I am very familiar with and feel I can analyze well.

From an industry competition perspective, this industry is thick with competition. Many of these companies, like my own, have been in business for well over a century. Competition is fierce to hired many of the highly skill experts needed in this field, like actuaries and underwriters. The pandemic only increased this competition, as the virtual nature of work has created new opportunities for these experts to work outside the physical confines of a corporate office. Due to the intense regulatory environment of this industry, technical experience and knowledge can make or break a company’s ability to innovate with new products or implement new technology to aid in increased service or to create new efficiencies.

The next force, bargaining power of buyers is also high. Buyers can choose from a multitude of carriers for products that are quite similar. Technology has decreased the barriers for these purchases, and companies must differentiate themselves based on superior service or with a unique value proposition. The buyer has no real ability to decrease or negotiate the price, however they can shop for the best deal and find plenty of companies who can offer the best or better pricing.

The third force, bargaining power of suppliers is an interesting one. While this isn’t as high of a risk as some of the other forces for the life insurance industry, it does exist. Suppliers in our industry, whether for IT, consulting, reinsurance or other work are generally more limited. So, the fewer choices give the suppliers more leverage. For example, the number of reinsurers is much more limited as compared to the overall competitive landscape of the bigger industry. However, they need to provide services that are scalable to the industry. I have seen several instances where suppliers price themselves out, and the industry simply finds a solution or discontinues the offering. It’s a definite balancing act, and the suppliers do not hold all the power. This was also interesting during the pandemic. The reinsurers implemented covid restrictions and protocols we had to maintain in order for them to accept the risk. They had the bargaining power to mandate these protocols to which we adhered.

The fourth force, threat of substitution is high. Products tend to be very similar from company to company, so substitution is a very real threat. Very few products or companies can differentiate themselves out of this situation in this industry. The organization I work for is a fraternal, which is our differentiator. However, within this space, we compete with several others like Thrivent, Knights of Columbus and Woodmen Life. While there are nuances to these companies, the general premise and product line up is very similar.

Finally, from the threat of entry exists but is not high. Due to the regulatory environment and the capital needed to start a financial services organization, there are not a lot of new players who enter the market. Over the past decade, many companies tried to come in using technology to replace the face-to-face advice of an advisor. Due to the complex nature of the products and services, these new companies have not taken off as it was anticipated they would. In addition, the generational buying patterns are not quite what anyone expected. According to LIMRA, a trade association for financial services, millennials still want face to face advice, after completing research online.

The life insurance industry is a mature industry with a lot of competition. There are many forces, such as pandemics, the economy and the regulatory environment that will continue to cause these five forces to change and evolve over time.

Sources: Financial Accounting for MBAs, https://www.kiplinger.com/personal-finance/insurance/life-insurance/603269/how-millennials-are-changing-the-life-insurance