Porter Five Forces Model

Topics: Strategic management, Management, Porter five forces analysis Pages: 3 (960 words) Published: May 19, 2013
Porter’s Five Forces Model: an overview

Porter’s Five Forces Model: an overview

Abstract
Porter’s Five Forces Model is a structured framework for analyzing commerce and business establishment. It was formed by Michael E. Porter of the Harvard Business School between 1979 and the mid 1980’s. Porter developed the Five Forces model in opposition to the SWOT (strengths, weaknesses, environmental opportunities, threats) analysis that was an industry standard for businesses to determine how they compared to other businesses in a certain market or if there was opportunity to expand into different markets.

Porter’s Five Forces Model: an overview
Porter’s Five Forces Model is a structured framework for analyzing commerce and business establishment. It was formed by Michael E. Porter of the Harvard Business School between 1979 and the mid 1980’s. Porter developed the Five Forces model in opposition to the SWOT (strengths, weaknesses, environmental opportunities, threats) analysis that was an industry standard for businesses to determine how they compared to other businesses in a certain market or if there was opportunity to expand into different markets. Porter’s original model identified five forces that could have potential impacts on any business’ activities in a market. The Porter forces included: - the rivalry among competing sellers in the industry; - the market attempts of companies in other industries to win customers over their own substitute products; - the potential market entry of new competitors; - the bargaining power and leverage exercisable by suppliers of inputs; and – the bargaining power and leverage exercisable by buyers of the product. The rivalry among competing sellers in the industry

Rivalry among firms varies considerably between industries. It is influenced, for instance, by the number of competitors, market growth, fixed costs, switching costs, exit barriers and diversity of rivals. The higher the degree of rivalry in an...

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