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How does high industry fixed cost affect each of the Porter’s five forces?
New entrants: high fixed costs imply considerable amounts of building, plant and machinery (eg depreciation and rent). If so, the capital investment needed would tend to be a barrier to entrance.
Rivalry: high fixed costs imply that, to cover these, the company will need to operate at high capacity and this is likely to intensify competition.
Customers and suppliers: if they know you have to cover your high fixed costs, this can give them a lever.
Substitutes: I don’t think this is consistently affected by high fixed costs (the substitute might or might not also have high fixed costs).
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