Industry Porters Five Forces Analysis


Porter's five force analysis offers a framework for analysing the nature of competition within an industry. Competitive structure of industry also helps to identify whether industry profitable and attractive enough for existing and new players. Every industry is different in Size, structure, distribution channel, lifecycle and of course profits for industry will is also different. For example, Pharma and Soft drink industry earns more profit in comparison Airline and Food Chain industry.
 
Michael Porter developed a method by which a business can analyse the competitive environment in which it operates in order to best devise its strategy.  Basically: know your competitors and how to beat them.
  1. Analyse the Bargaining Power of Supplier : Can suppliers capture more value or profit, or impact who gets business?
  2. Analyse the Bargaining Power of Buyers : How much impact do customers or buyers have on the industry?
  3. Analyse the Threat of New Entrants : How easy is it for new competitors to come into the industry and what are barriers to industry entry?
  4. Analyse the Threat of Substitutes:What alternative choices do customers have?
  5. Analyse the Rivalry Among Existing Firms : How intense is the level of competition among industry members?

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