Five Forces of Competition

Abstract Introduced by Michael Porter in 1979, the Five Forces of Competition framework has become the best known and most widely applied analytical framework in strategic management. This framework uses information on industry structure to explain and predict the intensity of competition within an industry, or within an industry segment, and in turn the level of profitability within that industry ore segment. It is used to guide choices of which industries and markets to enter, to allocate resources between a firm's different businesses, to develop strategies to influence industry structure, and to guide a firm's competitive positioning within an industry.