Estimate the level of competition within an industry and develop a strong business strategy with Porter's Five Forces analysis.
This tool was described by Harvard Business School professor Michael Porter, and since its publication in 1979, it has become one of the most popular and highly regarded business strategy tools.
Porter's Five Forces are used to measure the strength of current competition and what markets an organization can consider moving into.
What are the Porter's Five Forces?
- Bargaining power of suppliers. An assessment of how easy it is for suppliers to drive prices up.
- Bargaining power of buyers. An assessment of how easy it is for buyers to drive prices down.
- Rivalry among existing competitors. The main drivers are the number of and capability of competitors in the market.
- Threat of substitute products/services. When close substitute products exist in a market, it increases the likelihood of customers switching to alternative products in response to price increases.
- Threat of new entrants. Profitable markets attract new entrants, which in turn erodes profitability. Unless incumbents have strong and durable barriers to new entrants, profitability will decline.
Why is Porter's Five Forces analysis important?
- It helps organizations understand the factors affecting profitability in a specific industry.
- It helps organizations make decisions relating to entering a specific industry, whether to increase capacity in a specific industry, etc.
- It lets businesses clearly understand the forces that develop competitive strategies.
Why should you try Miro?
- It saves you time – just fill out our ready-made template. Customize it as you need it – all changes will be saved instantly on the board.
- You can upload documents and visual content integrated Miro with Google Drive, Drop Box, OneDrive, Box etc.
- You can create diagrams and add more templates to map your strategy, step-by-step.
- You can make a presentation right on the board and present it to all stakeholders.
- You can share real-time access with all stakeholders, keeping everyone on the same page and making collaboration visual and engaging.
Tip: Collaborate with your team online by sharing with them real-time access to the board for viewing, commenting, and editing.
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