The 5 Forces Model (Porter's Five Forces)

Porter's Five Forces is a framework to analyze the competitiveness of an industry. It considers five factors: the threat of new entrants (how easy or hard for new competitors to join), the bargaining power of suppliers (how much influence suppliers have over prices), the bargaining power of buyers (how much customers can push for better deals), the threat of substitute products (risk of alternative products replacing existing ones), and industry rivalry (how fierce the competition among existing companies is). Understanding these forces helps businesses assess profitability and develop strategies to improve their position in the market.