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Porter's Five Forces

L1Business analysisEnvironmentdiagnosticStages 1 to 5

Reference model

Porter’s Five ForcesCompetitive rivalry at the centre, with four forces pressing in on it: the threat of new entrants from above, the threat of substitutes from below, the bargaining power of suppliers from the left and of buyers from the right.Competitive rivalryNumber and balance of competitorsIndustry growthFixed costs · Exit barriersDifferentiationThreat of new entrantsEconomies of scaleCapital requirementsBrand loyalty · Channel accessRegulationThreat of substitutesRelative price–performanceBuyers’ readiness to switchSwitching costsBargaining power ofsuppliersFew suppliers, concentratedHigh switching costsUnique or critical inputsThreat of forward integrationBargaining power ofbuyersFew, large buyersPrice sensitivityLow switching costsThreat of backward integration

Rivalry sits at the centre; the other four forces press on it from each side.

About this model

Judges how attractive an industry is by how strongly five forces squeeze profit: rivalry among competitors, the threat of new entrants and of substitutes, and the bargaining power of buyers and of suppliers.

Michael E. Porter — “How Competitive Forces Shape Strategy”, Harvard Business Review · 1979, updated 2008

How to read it

  • Rate each force from 1 (weak pressure on profit) to 5 (intense pressure), and write the evidence behind the rating.
  • The stronger the forces overall, the less profit the average competitor in the industry keeps.
  • Look for the force that matters most: strategy is largely about positioning where the forces are weakest, or changing them.

What this does

Rates industry attractiveness across five competitive pressures — new entrants, substitutes, buyer power, supplier power, and rivalry.

When to use it

Startup through Maturity, whenever you need an honest read on how defensible your position really is.

What happens next

Feeds Business Model Canvas (Key Activities, Cost Structure framing).

Golden thread

Builds on ←

  • pestel

Feeds into →

  • bmc

Framework library: Strategy and environment (layer L1), lifecycle stages 1 to 5.

Use this tool, free

Sign in to open the worksheet. Your work saves as you type, the AI can draft the parts you have not filled in, and you finish with an analysis and a 30/60/90-day action plan.

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Hand-built by Eccellere and reviewed by Eccellere on 02/11/2026. Guidance, not advice: apply your own judgement.