Description
Revolutionize your company’s strategy with a comprehensive analysis tool focusing on suppliers, consumers, and competitors. Uncover vulnerabilities and explore scalability perspectives for your business. This framework dissects the competitive forces impacting industries. Delving into supplier and buyer influence, competitive rivalry, threat of substitutes, and the entry of new competitors, PORTER Analysis unveils key industry dynamics.
By decoding these forces, businesses gain a strategic compass, enabling them to fortify strengths, mitigate risks, and optimize opportunities, all pivotal for sustaining a competitive advantage in a dynamic marketplace.
Benefits
- Fosters strategic and critical thinking within teams.
- Aligns teams towards awareness of market risks.
- Supports teams in developing a collective effort towards achieving strategic objectives.
Time needed
2 days.
When to Use It
Annually.
How to use
Evaluate the impact strength (low, low-medium, medium, high) on your business from major forces, draw conclusions, and establish an action plan for each force individually.
Pro Tips for Optimal Utilization:
Do:
An impact above medium/high signals the weak points of your company, prioritizing urgent action plans. Conversely, a minimal impact presents opportunities for expansion.
Don't:
The PORTER 5 Forces analysis isn’t the sole tool for business environmental analysis. It’s recommended to use it in conjunction with other analysis tools, such as PESTEL or SWOT. What PORTER 5 Forces Analysis Doesn’t Do:
- Focuses solely on the power of suppliers, consumers, substitutes, or new competitors, neglecting technological advancements and external forces like government policies, taxes, and the environment.
- Lacks quantitative insights into the depth and impact of the five forces, making it challenging to identify the most and least crucial forces.
- Serves as a simple tool outlining five external factors, providing only an initial understanding of a company’s competitive position but not a detailed investigation.Â