Porter’s Five Forces

The Five Forces model of industry analysis introduced by Michael Porter is one of the best known strategic planning models which draws on industrial economics to provide a strong intellectual framework to explain why some industries are much more profitable than others.

In this series of blog articles, I look at the five forces, first as a system and then the individual components.

Exit Barriers Intensify Competitive Rivalry

by Paul Simister on November 18, 2011

Exit barriers intensify competitive rivalry by stopping businesses that are losing money from leaving the industry when there is little or no hope of future profitability. The Five Forces modelĀ  from Michael Porter is an important way to understand the competitive pressures within an industry and at the centre is competitive rivalry.

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I’m ending my look at Michael Porter’s Five Forces Analysis with a look at competitive rivalry, perhaps the most powerful and destructive of the five forces as competitors carelessly compete away any profits and even create price wars that cause long term damage to industry profitability. Competitive Rivalry Or Rivalry Amongst Existing Firms Michael Porter […]

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Bargaining Power Of Suppliers : Uses & Abuses

by Paul Simister on October 11, 2011

The bargaining power of suppliers and vendors is one of the Five Forces that Michael Porter identified that determine industry structure and attractiveness. In many ways the bargaining power of suppliers is the same as the bargaining power of customers but seen from the other party’s perspective. Powerful suppliers in the industry value chain can […]

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Threat of Substitutes In Porter’s Five Forces Model

by Paul Simister on October 9, 2011

The threat of substitutes is an important element in the Five Forces Analysis model introduced by Michael Porter in his book Competitive Strategy. The issue of the threat of substitutes is always a factor which limits the profit potential of a market. In times of economic difficulties, the threat accelerates sharply but it also represents […]

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Bargaining Power Of Buyers Or Customers

by Paul Simister on October 8, 2011

The bargaining power of buyers or customers is one of the five forces that determine industry profitability in Michael Porter‘s Five Forces Analysis model explained in his book Competitive Strategy. The basic idea is that by using theirĀ  bargaining power as a powerful buyer, some customers can capture a high proportion of the value you […]

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Barriers To Entry & The Threat Of New Entrants

by Paul Simister on October 5, 2011

Today we will look at how you can use barriers to entry to reduce the threat of new entrants into your market. The threat of new entrants is one of the forces in Michael Porter’s Five Forces model of industry analysis. This threat applies to any business of any size, big or small. It can […]

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Five Forces Analysis – Michael Porter

by Paul Simister on October 3, 2011

In my guide to strategic planning models I described Michael Porter’s Five Forces Analysis as probably the most famous of the strategy models but until now, I haven’t written about it in detail on my blog. Background To The Five Forces Analysis Model The Five Forces Analysis model was first introduced in the Harvard Business […]

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