Quick Definition

Porter's Five Forces is a framework for analyzing the competitive environment of an industry. It helps businesses assess the potential profitability of an industry by examining five key sources of competitive pressure.

Examples

• 1A smartphone manufacturer using Porter's Five Forces to evaluate the threat of new entrants and the bargaining power of suppliers.
• 2A local coffee shop analyzing the intensity of competitive rivalry in the area and the threat of substitute products like tea or energy drinks.
• 3A pharmaceutical company assessing the bargaining power of buyers, especially large healthcare providers and insurance companies, and the threat of new entrants with generic drugs.

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