Porter's Five Forces Analysis is a micro-environment framework that attempts to analyze the level of competition within an industry. The Five Forces include – three forces from 'horizontal' competition: the threat of substitute products or services, the threat of established rivals, and the threat of new entrants; and two forces from 'vertical' competition: the bargaining power of suppliers and the bargaining power of customers.
The model is used to analyze the competitive environment in terms of five key forces that impact a company's profitability and influence its strategy. Professor Michael E. Porter set our his Five Forces model in articles published in the Harvard Business Review.
Created by Associate Professor Elizabeth Mezick.