Six Forces Model
Definition of 'Six Forces Model'A strategic business tool that helps businesses evaluate the competitiveness and attractiveness of a market. The six force model provides an industry-view and analyzes six key areas:Competition - Information regarding present competition New Entrants - Information regarding the ease with which new competition could enter the market End Users/Buyers - Information regarding the buyers' abilities to affect price Suppliers - The number and type of sellers Substitutes - The ease by which a product or service can be substituted Complementary Products - The impact of related products and services already in the market |
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Investopedia explains 'Six Forces Model'The five forces model was originally developed by Michael E. Porter of Harvard Business School. The six force model later came in the mid-1990s and added complementary products. It is used to evaluate a firm's strategic position in a particular marketplace. The Six Force Model can also be used to determine the market's overall attractiveness in relation to profitability and competition. |
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