Porter: Five Forces

Assess pressures on the economics of an offer.

Procedure

• Define the buyer and market boundary.
• Assess entrants, suppliers, buyers, substitutes, and rivalry.
• Identify the strongest pressure and plausible changes.
• Choose a response and track its economic effect.

Questions

• What substitute limits willingness to pay?
• Which supplier could remove access or raise cost?

Evidence to collect

• Competitor and substitute list
• Supplier dependencies
• Buyer switching costs

Limits

• Force ratings are judgments; record the evidence and uncertainty behind each.

Sources

• Harvard Business School, The Five Forces: Main body

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