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Porter's 5 Forces

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Dictionary Says

Definition of 'Porter's 5 Forces'

Named after Michael E. Porter, this model identifies and analyzes 5 competitive forces that shape every industry, and helps determine an industry's weaknesses and strengths.

1. Competition in the industry
2. Potential of new entrants into industry
3. Power of suppliers
4. Power of customers
5. Threat of substitute products
Investopedia Says

Investopedia explains 'Porter's 5 Forces'

Frequently used to identify an industry's structure in order to determine corporate strategy, Porter's model can be applied to any segment of the economy to search for profitability and attractiveness.

Articles Of Interest

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    These five qualitative measures allow investors to draw conclusions about a corporation that are not apparent on the balance sheet.

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