Porter's Five Forces analyzes the competitive intensity and attractiveness of a market. The five forces are: (1) Threat of New Entrants, (2) Bargaining Power of Suppliers, (3) Bargaining Power of Buyers, (4) Threat of Substitutes, (5) Rivalry Among Existing Competitors.
Each force is scored 1-5 (1=low, 5=high). High combined score = unattractive market (hard to make profit). Low combined score = attractive market (easier to profit).
Key Takeaways
- Five Forces: Entrants, Suppliers, Buyers, Substitutes, Rivalry.
- Score each 1-5. Total score indicates market attractiveness.
- High barriers to entry protect you once you're in.
- Use the analysis to identify strategic priorities.