Chapter 14

The Competitive Forces:

Michael Porter, explains the framework of his five competitive forces (listed below).

1. Existing competitive rivalry between suppliers

2. Threat of new market entrants

3. Bargaining power of buyers

4. Power of suppliers

5. Threat of substitute products (including technology change)

He guides us through applying these five forces, which in turn helps us answer game-changing questions

such as:

 How do you position yourself to find that spot within the industry where you can command a

good profit?

 What is really causing profitability in your industry?

 What are the trends that are most likely to be significant in changing the game in the industry?

 Where are the constraints; and if you relax them, they might allow you to find a really strong

competitive position.
OR use the diagram below: