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Management Theories

Porter's Five Forces

Strategic Planning and Performance Management Frameworks

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Porter's five forces is a framework for analyzing the competitive intensity and profitability of an industry, developed by Michael Porter and first published in the Harvard Business Review in 1979. It identifies five forces that shape competition within an industry: the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitute products or services, and rivalry among existing competitors. Managers and strategists use the framework to assess how these forces combine to determine an industry's overall attractiveness and to identify where a company might build a defensible competitive position.

Facts
Core Claim
Five competitive forces determine the competitive intensity of an industry and, consequently, its attractiveness and profit potential. 1
Origin Year
1979 1
Cross-Tradition Connections

Critiqued Here

Blue Ocean Strategy, Management Theories

Kim and Mauborgne present Blue Ocean Strategy explicitly as an alternative to Porter competitive, five-forces style strategy.

Associated With

Both frameworks were developed by Michael Porter as complementary tools for competitive strategy analysis.

Porter developed Value Chain Analysis as a complementary tool for locating the sources of competitive advantage the Five Forces model maps.

Developed By

Sources
1. Wikipedia, Porter's Five Forces
WikipediaWikipedia, Porter's five forces analysis lead section
Quote, Wikipedia, Porter's five forces analysis lead section
It is rooted in industrial organization economics and identifies five forces that determine the competitive intensity and, consequently, the attractiveness or unattractiveness of an industry with respect to its profitability.
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1. Wikipedia, Porter's Five Forces
WikipediaWikipedia, Porter's five forces analysis lead section, second paragraph
Quote, Wikipedia, Porter's five forces analysis lead section, second paragraph
This framework was first published in Harvard Business Review in 1979.
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1. Wikipedia, Porter's Five Forces
WikipediaDeveloped By: Michael PorterView the Source
1. Wikipedia, Porter's Five Forces
WikipediaAssociated With: Porter's Generic StrategiesView the Source
1. Wikipedia, Porter's Five Forces
WikipediaAssociated With: Value Chain AnalysisView the Source
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