Porter's 5 Forces
What Does Porter's 5 Forces Mean?
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 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.
Related Links
- Industry Handbook - In this feature, we take an in-depth look at the various techniques that determine the value and investment quality of companies from an industry perspective.
