Five Forces Market Analysis
Porter's Five Forces is a strategy framework for examining the pressures around an industry. It separates the bargaining power of suppliers and buyers from rivalry among existing competitors, the threat of substitutes, and the threat of new entrants. Keeping the forces distinct prevents a market discussion from collapsing into a generic competitor list. Start by defining the target industry clearly, then gather evidence for each force: concentration, switching costs, alternatives, regulation, and differentiation are common inputs. This diagram is a reusable visual outline for that work. The quality of the conclusion depends on the evidence attached to each force, not on the diagram alone.
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Scenario
Learning the Five Forces framework
Key decisions
- Industry: Define the market boundary before analysis.
- Forces: Assess each pressure independently.
- Evidence: Support each force with customer, supplier, and competitor facts.
When to reuse this
Use this basic diagram to introduce the framework before applying it to a specific market.
Frequently asked questions
Who created Five Forces?
Are competitors the only force?
Can a company use the framework for one product?
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