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Porter's five forces analysis

Porter's five forces analysis is a framework for the industry analysis and business strategy development developed by Michael E. Porter. It derives five forces which determine the competitive intensity and therefore attractiveness of a market. 

Strategy consultants occasionally use Porter's five forces framework when making a qualitative evaluation of a firm's strategic position.

Porter's five forces include:

three forces from 'horizontal' competition:

  1. threat of substitute products,
  2. the threat of established rivals,
  3. and the threat of new entrants; and

two forces from 'vertical' competition:

  1. the bargaining power of suppliers,
  2. bargaining power of customers.

 porter five forces model

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