What is it about?
The Porter's Five Forces tool is used to determine, identify and analyse five competitive forces shaping business and related industry. The tool helps to increase strategic advantage over competing companies within an industry by determining the long-run profitability and vulnerability of key markets or market segments. The concerned five forces are:
- The power of suppliers
- The power of buyers
- The barriers to entry and/or exit
- The substitute products
- The overt/covert rivalry
Who is it for?
The Porter's Five Forces tool is often used by competitive strategists, C-level managers, and consultants to determine, define and assess the recent and future relevant industry forces and their structure; identify the participants and segment them into groups such as buyers and buyer groups, suppliers and supplier groups, competitors, substitutes, potential entrants. They further assess the underlying drivers and consistency of each competitive force to determine which forces are strong and which are weak and why. It is absolutely for stakeholders who aim to identify aspects of industry structure that might be influenced by competitors, new entrants, or by your company's action.