Porters Five Forces

Porter’s Five Forces Framework is a method for analyzing competition of a business.

It draws from industrial organization (IO) economics to derive five forces that determine the competitive intensity and, therefore, the attractiveness (or lack thereof) of an industry in terms of its profitability.

An “unattractive” industry is one in which the effect of these five forces reduces overall profitability.

The most unattractive industry would be one approaching “pure competition”, in which available profits for all firms are driven to normal profit levels.

The five-forces perspective is associated with its originator, Michael E. Porter of Harvard University.

This framework was first published in Harvard Business Review in 1979


Content of this post have been sourced from Wikipedia and the Bubble book.

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