Two things determine your company's profitability-the industry in which it competes and its strategic position in the industry. Some industries have inherently low profit potential while others are highly profitable. The most profitable companies have a strong competitive position in a highly profitable industry. The poorest companies have weak positions in weak industries.
Five Competitive Forces: Michael Porter's Five Forces have become a yardstick for assessing industry profitability. They are...
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- Buyers'/customers' power
- Suppliers' power
- Rivalry among competitors
- Threat of new entrants
- Threat of substitute products
Industry Analysis: You can use industry analysis in several ways to guide your strategic decisions. Benefit from industry analysis by:
- Understanding the competitive forces in your industry.
- Assessing the attractiveness of, and growth opportunities within, a new industry.
- Developing effective strategies to raise your profitability, power, and competitive position in an industry.
- Take the Five Forces survey to analyze your current industry or any other industry of interest.
- The survey has five parts for a total of 31 questions.
- You can do the analysis yourself or have your team participate in the assessment.
- After you (or your team) complete the survey, you will receive a report analyzing the strength of each force in the industry and suggesting industry-specific strategies for maximizing competitive position and profitability.
Download a Sample Report below.
To sign up for the Five Forces analysis click here.