Five Forces Model

The Five Forces Model, developed by Michael Porter, is a framework for analyzing a market’s competitive environment. It considers five key factors: the threat of new competitors entering, the bargaining power of suppliers, the bargaining power of customers, the threat of substitute products or services, and the intensity of rivalry among existing competitors. Understanding these forces helps businesses assess industry attractiveness, identify potential challenges, and develop strategies to improve their competitive position. Essentially, it provides a comprehensive view of the factors that influence profitability and competitiveness within an industry.