Porter's Five Forces is a popular framework used for analyzing the competitive forces within an industry. When used correctly, it provides insights into the dynamics that influence a company's profitability and competition.

Here's a rundown of the 5 forces from the template:

  • Competitive Rivalry: The intensity of competition among existing firms in the industry.
  • Threat of New Entrants: The ease with which new competitors can enter the market.
  • Bargaining Power of Suppliers: The power suppliers have over the price and quality of inputs.
  • Bargaining Power of Customers: The influence customers have on pricing and terms.
  • Threat of Substitutes: The likelihood of customers finding alternative solutions or products.

How do I use the template?

First time using the template? Don't worry! Here’s a step-by-step guide to help you navigate and utilize the template for your competitive analysis:

Competitive Rivalry:

  • Identify key competitors.
  • Assess their strengths, weaknesses, market share, and competitive strategies.

Threat of New Entrants:

  • Evaluate barriers to entry such as capital requirements, technology, regulatory factors, and brand loyalty.
  • Consider the likelihood and impact of new entrants on the market.

Bargaining Power of Suppliers:

  • Identify major suppliers.
  • Assess their ability to influence prices and terms, the availability of substitute inputs, and the importance of your business to them.

Bargaining Power of Customers:

  • Analyze the concentration of customers, their price sensitivity, and the availability of alternative products.
  • Determine how easily customers can switch to competitors.

Threat of Substitutes:

  • Identify alternative products or services that meet the same need.
  • Assess the relative price and performance of these substitutes and their potential impact on your market.

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