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Guide to Business Planning

Porters five forces


Threat of New Entrants Rivalry Among Existing Firms Power of Suppliers Power of Customers

The Five Forces were Porters conclusions on the reasons for differing levels of competition, and hence profitability, in differing industries. They are empirically derived, i.e. by observation of real companies in real markets, rather than the result of economic analysis. Porters Five Forces model is a useful generic structure for thinking about the nature of industries. The definition of an industry is as follows: The group of firms producing products that are close substitutes for each other Michael Porter Competitive
Strategy

Threat of Substitutes

The strength of the five forces will determine the level of profit within an industry that a competitor can expect to make
Guide to Business Planning

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