Porter’s 5 Forces

Porter’s 5 Forces is a framework for analyzing the competitive forces within an industry, developed by Michael E. Porter. The five forces are:

1. Rivalry Among Existing Competitors: Number of rivals? Concentrated or fragmented? Do they offer similar products?
2. Threat of New Entrants: Does entry in the sector require large/fixed investments? Do regulations harden entry?
3. Threat of Substitute Products or Services: Are there attractive and similarly-priced products/services?
4. Bargaining Power of Buyers: Large or few buyers? Can they switch easily to another product?
5. Bargaining Power of Suppliers: Large or few suppliers? Do they provide critical resources?

Then we can also analyze: What about the market size or the potential growth of the market?

Diagram