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Michael Porter’s Five Forces Model was introduced in this week’s reading. Porter’s Five-Forces Model 1. Porter’s Five-Forces Model of competitive analysis is a widely used approach for developing strategies in many industries. Figure 3-3 illustrates Porter’s Five-Forces Model. The intensity of competition among firms varies widely from industry to industry. Table 3-8 reveals the average profit margin and return on investment for firms in different industries. 2. According to Porter, the nature of competitiveness in a given industry can be viewed as a composite of five forces: a. Rivalry among competitive firms b. Potential entry of new competitors c. Potential development of substitute products d. Bargaining power of suppliers e. Bargaining power of consumers Learning Activity the video below that was part of your assigned reading for the week gives some valuable insight into the thinking behind this model.
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