Porter's 5 Forces Explained

Porter’s Five Forces analysis applies to industry sectors.

All businesses in a particular industry are likely to be subject to similar pressures that determine how attractive the sector is.

As with PEST analysis, Porter’s five forces model can be used to identify critical success factors (CSF) and for ongoing monitoring of key issues affecting competitive advantage.

If businesses are able to, they should:

• Avoid business sectors which are unattractive because of the five forces.

• Try to mitigate the effects of the five forces. For example, supplier power is lessened if a long-term contract is negotiated; competition is reduced by taking over a rival.


(source: Kaplan Publishing)



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