Porter’s 5 Forces

High level…

Porter's Five Forces is a model that identifies and analyzes five competitive forces that shape every industry and helps determine an industry's weaknesses and strengths. Five Forces analysis is frequently used to identify an industry's structure to determine corporate strategy.

The five forces are frequently used to measure competition intensity, attractiveness, and profitability of an industry or market.

KEY TAKEAWAYS

• Porter's Five Forces is a framework for analyzing a company's competitive environment.

• The number and power of a company's competitive rivals, potential new market entrants, suppliers, customers, and substitute products influence a company's profitability.

• Five Forces analysis can be used to guide business strategy to increase competitive advantage.