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Operations And Supply Chain Management
Found in: Page 690
Operations And Supply Chain Management

Operations And Supply Chain Management

Book edition 14th
Author(s) F. Robert Jacobs
Pages 800 pages
ISBN 9780078024023

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Short Answer

Question: These are the five forces of the five forces model.


According to Porter, the five primary sources of competitive pressure within an industry are represented by five factors. The model is based on the following five forces:

  1. Buyer power.
  2. Potential entrants.
  3. Suppliers.
  4. Substitute products.
  5. Competitors in the industry.
See the step by step solution

Step by Step Solution

Step 1: Introduction

The five forces model is a strategy for determining a company's competitive position in comparison to its competitors. This approach was created by Michel Porter to showcase a company's strengths and possibilities.

Step 2: Analyze

Porter's Five Forces is a straightforward and effective approach for identifying the primary sources of competition in your company or area. The model is based on the following five forces:

1. Buyer power: The ability or power of customers to push prices.

2. Potential entrants: The threat of future market entrants and their capacity to take present market share.

3. Suppliers: To evaluate a supplier's negotiating strength over raw material pricing and lead time.

4. Substitute products: The number of near replacements available in the market for a company's offering and their influence on-demand elasticity.

5. Competitors in the industry: The number of competitors in the industry who may engage in a pricing war.

Hence, this model helped us in understanding the internal and external environments for better decision-making and strategic purposes.

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