October 2013
Intermediate to advanced
272 pages
5h 45m
English
Content preview from The Little Book of Big Management Theories
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THEORY 64
PORTER’S FIVE FORCES THEORY
Use to summarise your current competitive situation.
Michael Porter’s five forces theory is a framework for organisational analysis and business strategy development. Porter outlines five forces that determine competitive intensity and therefore the overall profitability of a service or product.
PORTER’S FIVE FORCES:
Threat of new entrants: Profitable markets that yield high returns will attract new entrants. This will eventually decrease profitability for all organisations in that sector.
Threat of substitute products or services: The existence of improved versions of your product and substitute, or near substitute, products increases the likelihood that customers will switch to alternatives ...
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