Porters five forces

What is Porters five forces? The below diagram explains Porters five forces. This chart shows an important concept or a framework to help one run their business, improve company's strategy, internal processs, enhance project management, technology, and client experience.

Porters five forces

The five forces are frequently used to measure competition intensity, attractiveness, and profitability of an industry or market. Porter’s five forces are: 1. Competition in the industry. 2. Potential of new entrants into the industry. 3. Power of suppliers.

Although, Porter’s five forces is a great tool to analyze industry’s structure and use the results to formulate firm’s strategy, it has its limitations and requires further analysis to be done, such as SWOT, PEST or Value Chain analysis. This is Porter’s five forces analysis example for an automotive industry.

The Five Forces is a framework for understanding the competitive forces at work in an industry, and which drive the way economic value is divided among industry actors.