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Porter's Five Forces

Understanding the tool

❶This creates a third choice and adds to the competition mix. By using this site, you agree to the Terms of Use and Privacy Policy.

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Example of Porter's Five Forces
Key Industry Structure Concepts
Understanding the Five Forces

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How the Five Forces Work

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The five competitive forces reveal that competition extends beyond current competitors. Customers, suppliers, substitutes and potential entrants—collectively referred to as an extended rivalry—are competitors to companies within an industry. The five competitive forces jointly determine the strength of industry competition and profitability.

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How Competitive Forces Shape Strategy The state of competition in an industry depends on five basic forces, which are diagrammed in the Exhibit. The strongest competitive force or forces.

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Porter’s five forces model is an analysis tool that uses five industry forces to determine the intensity of competition in an industry and its profitability level. Competition Within the Industry. recommends taking each of the five forces and weighing them to determine the most important concerns for your business. "Five Forces of Competitive.

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"Understanding the competitive forces, and their underlying causes, reveals the roots of an industry's current profitability while providing a framework for anticipating and influencing. According to the textbook, the five competitive forces included in the five-forces model determine: the average rate of return for the firms in an industry According to the textbook, how do well-managed firms respond to the five-forces that determine industry profitability?