How to use Porter’s 5 Forces

What is Porter’s 5 Forces model? This model helps marketers and business managers to look at the ‘balance of power’ in a market between different types of organisations, and to analyse the attractiveness and potential profitability of an industry sector. It’s a strategic tool designed to give a global overview, rather than a detailed business analysis technique. It helps review the strengths of a market position, based on five key forces. Porter’s Five Forces works best when looking at an entire market sector, rather than your own business and a few competitors. How can I use Porters 5 Forces? To apply Porter’s Five Forces, you need to work through these questions for each area: Force 1: Threat of New Entry? Force 2: Buyer Power? Force 3: Threat of Substitution? Force 4: Supplier Power? Force 5: Competitive Rivalry?  Threat of New Entry If a new businesses can be easily started up in your sector without substantial investment then this is a threat. The Internet has made t
http://www.smartinsights.com/marketing-planning/marketing-models/use-porters-5-forces/

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s