Porter's Five Forces: Dissecting Industry Profitability
Analyze five competitive forces to understand why your industry is profitable (or not) and who captures the value.
Goal
Understand industry structure to position the organization in the value chain and locate profit leaks.
Steps
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1
Force 1 — Threat of new entrants: What are the barriers? (capital, regulation, brand, network effects).
Expected Outcome
Evidence base
School: Strategic Management / Industrial Organization
Founders: Michael Porter (1979)
Created by Porter in HBR (1979) and expanded in "Competitive Strategy" (1980). Became the most-used industry structure framework despite later refinements.
Keywords
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