I really like Porter’s Five forces model. To profess my love, I created a quiz based on the model (give it a whirl when you have a chance). Unlike other models (I see you SWOT) which can sometimes seem inward looking and vague, the 5 Forces model gets straight to the point with simplicity and clarity. The insights you can get are widely and immediately applicable across industries. The model taught pretty much everywhere and it’s a good starting point to build on further using more… ‘intense’ frameworks.
What’s Porter’s Five Forces about?
Porter’s Five Forces is a tool that helps people understand how hard or easy it is to do well in their business. It looks at five things: how many other businesses are competing, how easy it is for new businesses to start, how much power the people who sell you things have, how much power your customers have, and if there are other products that can take your place. By thinking about these five things, business owners can make smart choices to stay strong and grow. It’s like checking the weather before going outside—you want to be ready for anything!
What’s the history of the model?
Porter’s Five Forces model was created by Michael E. Porter, a professor at Harvard Business School, in 1979. He wanted to help businesses understand what affects competition in their industry. Before this model, most people only looked at direct competitors. Porter showed that there are more things to think about—like how strong suppliers and customers are, and how easy it is for new businesses to start or for new products to replace yours. His model changed the way people plan business strategies. Even today, it’s still used by companies around the world to study their markets and make smart decisions.
Why should businesses use it?
Businesses that take time to measure their environment have a huge advantage over those that don’t. They understand their competition, know what customers want, and can see changes coming before it’s too late. These businesses make smart moves, avoid big risks, and find better ways to grow. On the other hand, companies that ignore their environment often get left behind. They miss important signals, make bad decisions, and struggle to keep up. Knowing your surroundings isn’t just smart—it’s essential for survival. In today’s fast-changing world, the difference between success and failure often comes down to who’s paying attention.