Porter's Five Forces is a popular framework used for analyzing the competitive forces within an industry. When used correctly, it provides insights into the dynamics that influence a company's profitability and competition.
Here's a rundown of the 5 forces from the template:
- Competitive Rivalry: The intensity of competition among existing firms in the industry.
- Threat of New Entrants: The ease with which new competitors can enter the market.
- Bargaining Power of Suppliers: The power suppliers have over the price and quality of inputs.
- Bargaining Power of Customers: The influence customers have on pricing and terms.
- Threat of Substitutes: The likelihood of customers finding alternative solutions or products.
How do I use the template?
First time using the template? Don't worry! Here’s a step-by-step guide to help you navigate and utilize the template for your competitive analysis:
Competitive Rivalry:
- Identify key competitors.
- Assess their strengths, weaknesses, market share, and competitive strategies.
Threat of New Entrants:
- Evaluate barriers to entry such as capital requirements, technology, regulatory factors, and brand loyalty.
- Consider the likelihood and impact of new entrants on the market.
Bargaining Power of Suppliers:
- Identify major suppliers.
- Assess their ability to influence prices and terms, the availability of substitute inputs, and the importance of your business to them.
Bargaining Power of Customers:
- Analyze the concentration of customers, their price sensitivity, and the availability of alternative products.
- Determine how easily customers can switch to competitors.
Threat of Substitutes:
- Identify alternative products or services that meet the same need.
- Assess the relative price and performance of these substitutes and their potential impact on your market.
Download your free template
This template is only available to Pro and Pro+ Members. But if you’re not already a member, don't worry! We still have tons of templates and frameworks available for free in our Insider plan.
