STRATEGY

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.

UPDATED 2026-09-25
EXAMPLEFive Forces Market Analysis
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CASE ANALYSIS

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.

FAQ

Frequently asked questions

Who created Five Forces?01
Michael Porter introduced the framework as a way to analyze industry structure and competitive pressure.
Are competitors the only force?02
No. Rivalry is one force; suppliers, buyers, substitutes, and new entrants can also affect industry pressure.
Can a company use the framework for one product?03
Yes, if the product's market boundary and alternatives are defined clearly enough to assess the five forces.
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