Tools

Porter’s Five Forces

Understand the competitive pressures that affect your profits.

This tool helps you think through competitive conditions affecting profitability in your chosen market. The result is based on your own information and judgement.

Consider businesses operating in the same market. Do not assume a problem specific to your business applies to the whole industry.

Go to another step · 1/7

1. Analysis scope

Instead of “the coffee industry”: cafés serving morning coffee customers in a particular business district.

Which product or service?

Which customer group?

Which geographical market?

Fictional café worksheet

This is a separate learning example, not real research. It does not change your own draft.

Scope: Morning coffee served to office workers in one business district. Rivalry: High; in this example, three cafés compete on similar prices and speed. Needs checking. Entry: Unknown; investigate permits and suitable premises. Suppliers: Medium; in this example, the quality of alternatives and switching costs are unknown. Needs checking. Buyers: Medium; in this example, individuals can easily change cafés. Needs checking. Substitutes: High; flasks from home and office coffee could meet the same need. Needs checking. Possible action: Ask two suppliers for quotes. Target: next Friday. Completion check: prices, quality and delivery terms recorded side by side. Owner: business owner. These assessments are fictional. Your market needs its own observations and evidence.

Read the Porter article →

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stramentoPorter’s Five Forces

Your competitive analysis

Created on:

Analysis scope

Which product or service? Not yet specified Which customer group? Not yet specified Which geographical market? Not yet specified

Rivalry among existing competitors

Competitive pressure: Not yet assessed · Needs checking Your reasoning or observation: Not yet specified Source or supporting evidence: No supporting evidence specified Observation date: Not yet specified

Threat of new entrants

Bargaining power of suppliers

Bargaining power of buyers

Threat of substitute products or services

Unknowns and points to check

Which product or service? This part of the scope has not been specified yet. Which customer group? This part of the scope has not been specified yet. Which geographical market? This part of the scope has not been specified yet. Rivalry among existing competitors: I do not know — No supporting evidence specified Threat of new entrants: I do not know — No supporting evidence specified Bargaining power of suppliers: I do not know — No supporting evidence specified Bargaining power of buyers: I do not know — No supporting evidence specified Threat of substitute products or services: I do not know — No supporting evidence specified

Priority actions

1. Task: Not yet specified Target date: Not yet specified How will you know it is complete?: Not yet specified

No total score or profit forecast is produced. Market size, demand and your own business’s capabilities need separate investigation.