Tools / Porters Five Forces

This model is used to understand the structure of an industry or sector and as an framework within which to identify possible structural changes.
The model identifies five types of competitive pressure within a sector:
1. Established competitors
The strength of competition in the industry
2. New entrants to the market
The ease with which new competitors can enter the market if they see that you are making good profits (and then drive your prices down)
3. Substitute products
The extent to which different products and services can be used in place of your own
4. Bargaining power of suppliers
The power of suppliers to drive up the prices of your inputs
5. Bargaining power of customers
The power of your customers to drive down your prices

Applicable:

• Start up
• Growth
• Crisis
• Restructuring
• Change