Porter’S Five Forces Definition

Porter’s Five Forces is a framework for analyzing the competitiveness of a market. It was developed by Michael Porter in 1979.

The framework identifies five forces that shape competition in a market:

1. Threat of new entrants: The threat of new entrants is the degree to which it is easy or difficult for new firms to enter the market and compete with existing firms. When the barrier to entry is high, it deters new firms from entering the market and competing against incumbent firms. When the barrier to entry is low, it encourages new firms to enter the market and compete against incumbent firms.

2. Bargaining power of buyers: The bargaining power of buyers is the degree to which buyers can influence the prices of goods and services in a market. When buyers have high bargaining power, they can force sellers to lower prices. When buyers have low bargaining power, they cannot influence prices as much.

3. Bargaining power of suppliers: The bargaining power of suppliers is the degree to which suppliers can influence the prices of goods and services in a market. When suppliers have high bargaining power, they can force buyers to pay higher prices for goods and services. When suppliers have low bargaining power, they cannot influence prices as much.

4. Threat of substitute products or services: The threat of substitute products or services is the degree to which other products or services can be used in place of a particular good or service in a given market. When substitutes are available, they