Free Porter’s Five Forces Template
Download Here
What is the Porter’s Five Forces Analysis?
Porter’s Five Forces is a framework developed by Michael E. Porter to analyze the level of competition within an industry and the attractiveness of that industry for potential new entrants.
The five forces are:
– Threat of New Entrants: This refers to the ease with which new competitors can enter the industry. High barriers to entry, such as economies of scale, capital requirements, or regulatory hurdles, make it more difficult for new players to enter the market.
– Supplier Power: This examines the ability of suppliers to influence the prices, quality, or availability of inputs. Suppliers with high bargaining power can exert more control over the industry.
– Buyer Power: This considers the ability of customers to influence the prices, quality, or terms of the products or services they purchase. Buyers with high bargaining power can put pressure on industry participants.
– Threat of Substitute Products or Services: This assesses the availability and competitiveness of alternative products or services that can fulfill the same customer needs. High threat of substitutes can reduce the industry’s profitability.
– Competitive Rivals: This examines the intensity of competition among the existing players in the industry. High levels of rivalry, such as aggressive price competition or marketing campaigns, can make the industry less attractive.
By analyzing these five forces, organizations can better understand the competitive dynamics of their industry, identify potential threats and opportunities, and develop strategies to improve their competitive position and profitability.