Porter's Five Forces

Michael Porter's Five Forces framework (1979) is one of the most influential models in strategic analysis. It provides a structured approach to assessing the competitive intensity and attractiveness of an industry. Rather than focusing on individual competitors, the model examines the broader forces that determine how much profit an industry can sustain — and therefore how strategically positioned a business is within that industry. This lesson covers AQA specification topic 3.7.7.

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The Five Forces

Porter identified five competitive forces that collectively determine the profitability of an industry:

Force	Key Question
1. Threat of new entrants	How easy is it for new competitors to enter the industry?
2. Bargaining power of buyers	How much power do customers have to drive down prices?
3. Bargaining power of suppliers	How much power do suppliers have to drive up costs?
4. Threat of substitute products	How easily can customers switch to alternative products or services?
5. Competitive rivalry	How intense is competition among existing firms in the industry?