Porter’s five forces is a framework or a method that is used in an organization or company to determine the industry strength or weakness and competition in the business market. Porter’s five forces model helps us to break down the industry and more fully understand the intensity of the competition among industries or products. The analysis of the five forces has a huge impact on industry structure to determine strategy. Strategic analysis uses Porter’s five forces to understand whether their new products or services will work or not and what its barriers and how they can improve their new products or services quality? So that they can apply the right strategy in the right places. This model can be applied in any segment of the economy or business to understand the strengths or weaknesses and the competition, attractiveness, and profitability among organizations or industries. So, an organization can stay tuned to its vision and mission.
Porter’s five forces model was invented by Michael E Porter in 1979. Michael E Porter is a Harvard Business School professor. By his name, Porter’s five forces model was announced or published in his book Competitive Strategy. This theory concept is that five forces work in different ways and have a great impact on the industry. So that the industry ensures its potential profit. For the help of Porter’s five forces model, an organization understands what the affecting factors are about their decisions, whether they enter a specific industry, whether they need to increase their production or increase capacity, or their product, and whether they need any development of their products, services, or strategies.
