Using Porter’s Five Forces Model for Competitive Analysis

Overview

By the end of this guided project, you will be able to use the Porter’s Five Force model to determine the attractiveness and profitability potentials of your industry. The Five Forces is a model that was drawn from industrial organization economics to identify and describe the fundamental economic forces that shape every industry. The five forces are competition in the industry, potential of new entrants, power of suppliers, power of customers, and threat of substitute products. These forces determine the intensity of competition and hence the attractiveness and profitability of an industry. Essentially, awareness of the five forces can help you to understand the structure of your industry, and therefore stake a position is that less vulnerable For us to practically demonstrate how to use the framework to conduct analysis of an industry and make strategic decisions, we will analyze an energy services company as a case study. Example of the case study would empower you with the skillset to apply the model to your company or any other company of your choice. Porter’s Five Forces model can be used to determine the viability of a new business, or to evaluate growth potential for an existing business. The project is for strategist, business leader, and entrepreneurs that want to determine the competitiveness of their companies