Chapter 25

Porter’s Five Force Analysis

Five Forces: Purpose

This model is one of the most popular management models to be used in strategic planning. It would be applied when the organization is ­trying to analyze the attractiveness of a market and inherent risks, through understanding which entities hold the power. The model helps to identify competitive threats either through increased competition, price manipulation, or control of resources.

Five Forces: Structure and Description

Essentially the five forces model (Figure 25.1) points your attention to the players in the market, requiring an assessment of their nature and capabilities. The underlying hypothesis is that business operations are a power play, and that the one who holds the controls, ...

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