Porter’s Five Forces Model provides a structured framework for industry analysis and the competitive dynamics impacting an industry’s profitability. What is the main objective of Porter’s five forces model?
The originator of the five forces model is Michael Porter, a Harvard Business School (HBS) professor whose theories remain instrumental to business strategy even today. Porter’s five forces framework is utilized for strategic industry analysis, and focus on the following: Barriers to Entry – The difficulty in partaking in the industry as a seller.
Things that can affect a supplier’s power over company profits include: Here are two examples of how companies might use Porter’s Five Forces to assess their opportunities and profitability: In this example, Argento, an existing apparel company, is entering the athletic shoes and clothing market:
