Content area
Full Text
Loading the player...
Porter's Five Forces is an analysis scheme created by Harvard Business School professor Michael E. Porter. Using this analysis tool, business managers can gauge the level of competition within their company's industry and thus assess current and potential lines of business. The ultimate goal in this analysis is to help managers set their profitability expectations, because profitability decreases as the competition level increases.
Three of the five forces relate to the industry participants. The other two relate to the vertical participants - the suppliers and consumers.
The first force analyzes the ease of entry for new participants in the marketplace. If entry is easy,...