Porter's five forces analysis
Porter's five forces analysis is a framework for the industry analysis and business strategy development developed by Michael E. Porter. It derives five forces which determine the competitive intensity and therefore attractiveness of a market.
Strategy consultants occasionally use Porter's five forces framework when making a qualitative evaluation of a firm's strategic position.
Porter's five forces include:
three forces from 'horizontal' competition:
- threat of substitute products,
- the threat of established rivals,
- and the threat of new entrants; and
two forces from 'vertical' competition:
- the bargaining power of suppliers,
- bargaining power of customers.
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