Porter Five Forces
Assess industry rivalry, supplier power, buyer power, substitutes, and new entrants.
Porter's Five Forces analyses industry attractiveness: rivalry, supplier power, buyer power, threat of substitutes, and threat of new entrants. It explains profit pool dynamics beyond single competitors.
Pretty markets with brutal economics kill ventures. Five Forces clarifies where margin lives and what structural power you lack.
Market intelligence phase, category entry, pricing strategy. After PESTLE, before competitor matrix.
- Define industry boundary tightly.
- Score each force (low/medium/high) with evidence.
- Note trends shifting forces.
- Derive implications for positioning and partnerships.
- Feed threats/opportunities into SWOT.
- Industry scope explicit.
- Forces backed by examples.
- Implications for your model stated.
- Analysing "tech" broadly — useless.
- Static snapshot ignoring platform shifts.
- Confusing rivalry with one competitor grudge.
Northvale Systems five forces on supplier onboarding platforms: high buyer power from mandated adoption; moderate supplier power from tier-1 concentration; rivalry from ERP incumbents bundling basic portals.
PulseWell: buyer power medium-high (HR consolidates vendors); rivalry rising as HRIS bundles wellbeing; substitutes include free mindfulness apps; entrant threat from platforms — strategy: specialise analytics wedge.
Harbor Consulting: rivalry local and fragmented; buyer power high on capex projects; substitutes include online training; implication: niche manufacturing focus and referral moat.
Clearwater Initiative forces on community monitoring: donor power shapes reporting burden; substitute = government free tests with long delays; rivalry low among local NGOs if coordination exists.
/market schema porter-five-forces, IDs PFF-01 per force. Links PESTLE → SWOT.
Related techniques
Sources & further reading
- Porter, M. E. (1980). Competitive Strategy. Free Press.