Tool details
Porter's Five Forces
A market analysis that helps you get insight on the different drivers in the market and how they might affect your product or service.
Tool category:
Tool thumbnail
When to use
Before market introduction or to reposition a product.
Why you should
Analyse your competition in order to understand your standing in your industry.
What you get
Get insights into the market and discover a strategy to execute.
Steps to take
Define your market.
Draw the five forces matrix.
Identify the supplier power: List the number of suppliers in the model, the uniqueness of your product & the cost of changing the client indicates how easy is it for the supplier to drive up the price and gain control.
Identify the buyers' power: List the importance of each user and the cost for them to switch to a competitor shows how easy it is for the users/customers to drop the price.
Describe the competitive rivalry: List competitors with similar products that influence your power.
Define the threat of substitutes in the market: Are competitors able to do what you offer?
Define the threats of new entries: How high is the barrier of entry to the market, are scalable businesses in place, can you protect your technology?
Describe the impact on your business.
References & Links
