Sunday, September 13, 2009

Porter's Five Forces


A formal industry analysis such as Michael Porter's Five Forces Model is more in depth than simply looking for trends and general industry information. It can also help you better develop successful marketing strategies.

The analysis can provide insight into competitive environments. In the Five Forces Model, Porter explains that in any industry there are five forces that influence what happens within the industry:

- The threat of entry of new competitors (new entrants)
- The threat of substitutes
- The bargaining power of buyers
- The bargaining power of suppliers
- The degree of rivalry between existing competitors.


These five forces combine to make up the business environment. By studying the structure of and dynamics between these forces, you can discover opportunities for improving upon your marketing strategies. Porter designed his basic model to be applied to an entire industry.

No comments:

Post a Comment