Market
Porter's Five Forces
Last reviewedWhat is Porter's Five Forces?
Five forces that shape an industry's long-run profitability: rivalry among existing competitors, the bargaining power of buyers, the bargaining power of suppliers, the threat of new entrants, and the threat of substitutes.
When should you use Porter's Five Forces?
Market study and industry-attractiveness questions, and the "is the market attractive?" branch of an entry case.
What are its limits?
It describes the industry, not one company, and it is a snapshot. It says little about complementary products, fast-changing digital markets, or why one firm beats another. Easy to recite without linking each force to the client.
How do you tailor it to a case?
Focus on the one or two forces that shape this industry, say how they are changing, and state what each means for the client.
Where does it come from?
Michael E. Porter, "How Competitive Forces Shape Strategy", Harvard Business Review, 1979, and the book Competitive Strategy (1980).
Use a framework as a source of ideas, then put a structure built for this specific problem on the table. Reciting a framework by name is a common way to lose marks.