Five Forces
A framework developed by Michael Porter to analyze the level of competition within an industry.
Implications
A framework developed by Michael Porter used to analyze the competitive forces within an industry: the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products or services, and the intensity of competitive rivalry, often used to assess industry attractiveness and strategic positioning.
Example
Example: A company uses the Five Forces analysis to evaluate the attractiveness of entering the electric vehicle market, considering factors such as the threat of new entrants, the bargaining power of suppliers (battery manufacturers), and the intensity of rivalry among existing players.
Related Terms
Different from SWOT analysis, which focuses on internal strengths and weaknesses as well as external opportunities and threats, Five Forces specifically assesses the competitive dynamics within an industry.
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