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Friday, June 8, 2012

PORTER'S FIVE FORCES FRAMEWORK



PORTER’S FIVE FORCES FRAMEWORK


The five forces framework developed by Michael Porter is the most widely known tool for analyzing the competitive environment, which helps in explaining how forces in the competitive environment shape strategies and affect performance. The framework as shown in Figure-I  suggests that there are competitive forces other than direct rivals which shape up the competitive environment. These competitive forces are as follows:

1) The rivalry among competitors in the industry

2) The potential entrants

3) The substitute products

4) The bargaining power of suppliers

5) The bargaining power of buyers




Figure I : Five Forces Analysis




Five Forces Analysis


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