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Porter's 5 forces for businesses

Updated: Mar 3, 2023

Michael E. Porter, a professor of the Business School of Harvard created an analysis where to determine the strategy of a business in order to understand the competitive level and support the strategy for a long-term profitability.

It focuses rather on the industry's weaknesses and strengths and so, it's an external one, rather than on your business in particular. yet, it could definitely help you conceptualize your business in accordance to the trends and evolution of the market.

Let's see which are the 5 forces of Porter:

  1. Rivalry between the players (the intensity of competitors on the market or potential new entries)

  2. New players (intensity of entrance barriers to this particular market)

  3. Substitute products (imitations or variations of your product from competitors)

  4. Clients' negotiation power (the actual need of the clients of your product or their involvement in determining the actual price of buying

  5. Suppliers' negotiation power (intensity of the suppliers of a specific raw material on the market)

Do you find this analysis useful in planning your business? Let us know!

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