What Are 'Porter's Five Forces'?

Porter's 5 Forces is a model that identifies and analyzes the competitive forces that shape every industry, and helps determine an industry's weaknesses and strengths. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Term of the Day | Words to Know Porter's 5 Forces Porter's Five Forces is a model that identifies and analyzes five competitive forces that shape every industry and helps determine an industry's weaknesses and strengths. Five Forces analysis is frequently used to identify an industry's structure to determine corporate strategy. Porter's model can be applied to any segment of the economy to understand the level of competition within the industry and enhance a company's long-term profitability. The Five Forces model is named after Harvard Business School professor, Michael E. Porter. Read More » Related to "Porter's 5 Forces" Porter's 5 Forces vs. SWOT Analysis: What's the Difference? Each of the models seeks to define the company's position in the market. Porter's 5 Forces are generally more of a micro tool, while SWOT analysis is comparatively macro. Read More » Porter's 5 Forces vs. PESTLE Analysis: What's the Difference? Porter's 5 Forces examines where power lies in a competitive situation, while PESTLE identifies how various macro-environmental factors may affect an organization and its competitive standing. Read More » SPONSORED BY INVESCO The Complete Guide to ETFs ETFs are becoming increasingly popular and soaring to new heights among investors. Invesco's insights can help you determine if these investment vehicles are right for you. Learn More » The Pitfalls of Porter's 5 Forces Porter's Five forces are a staple of business schools everywhere, but there are some common pitfalls you should watch out for. Read More » Related Definitions Strength, Weakness, Opportunity, and Threat (SWOT) Analysis SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework used to evaluate a company's competitive position and to develop strategic planning. Read More » Qualitative Analysis Qualitative analysis uses subjective judgment based on non-quantifiable information, such as management expertise, industry cycles, and labor relations. Read More » Horizontal Integration Horizontal integration is the acquisition of a business that operates in the same industry. Read More » Value Chain A value chain is a business model that describes all of the activities that a business employs to create a product or service. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC, All Rights Reserved | Privacy Policy