Explore the Forces Shaping the Industry

Porter’s Five Forces is a tool that allows you to analyze your competitive environment by evaluating the power of five groups of economic determinants:

  1. The bargaining power of customers
  2. The bargaining power of suppliers
  3. The threat of substitution products
  4. The threat of new entrants
  5. Direct competition in the industry

In the industry in which your business operates, these forces have the potential either to increase or to reduce its competitive advantage. Having a good understanding of them will allow you to evaluate the strengths and weaknesses of your business in the industry so that you can improve your positioning in relation to competitors.

Diagram: Porter