Porter's Five Forces
Introduced by Michael E. Porter in his 1979 Harvard Business Review article, Porter's Five Forces is the gold standard for analysing the competitive intensity and attractiveness of an industry. The framework examines five structural forces that shape competition: the Threat of New Entrants (how easy is it for new competitors to enter?), Bargaining Power of Suppliers (how much leverage do suppliers hold?), Bargaining Power of Buyers (how much power do customers have?), Threat of Substitute Products or Services (can customers satisfy the same need another way?), and Competitive Rivalry (how intense is competition among existing players?). In a workshop setting, Five Forces analysis moves teams beyond fixating on direct competitors to see the full competitive system surrounding their business. Each force is rated for its current intensity and direction of travel. The output reveals which forces constrain profitability most, where the firm has strategic leeway, and which structural shifts (regulatory, technological, demographic) are likely to reshape the competitive landscape. It pairs naturally with PESTLE for macro context and SWOT for internal response planning.
How to run it
- 1
Set the scope: define the specific industry or market segment you are analysing. Ambiguity here makes the whole exercise vague.
- 2
Work through each of the five forces systematically — dedicate 10–15 minutes per force.
- 3
Competitive Rivalry: Who are the main competitors? How similar are their products? How intense is price competition? Rate overall intensity: Low / Medium / High.
- 4
Threat of New Entrants: What are the barriers to entry (capital, regulation, brand, scale)? Could a tech player or adjacent industry disrupt? Rate: Low / Medium / High.
- 5
Bargaining Power of Suppliers: How many suppliers exist? Are inputs commoditised or specialised? Could key suppliers integrate forward? Rate: Low / Medium / High.
- 6
Bargaining Power of Buyers: Are customers fragmented or concentrated? How price-sensitive are they? Can they switch easily? Rate: Low / Medium / High.
- 7
Threat of Substitutes: What alternative ways exist to meet the same customer need? Are substitutes improving in price or performance? Rate: Low / Medium / High.
- 8
Synthesise: Map all five forces on the hub-and-spoke diagram, discuss the overall industry attractiveness, and identify the 2–3 forces requiring strategic response.
Tips
The biggest mistake is analysing at too broad a level ('the tech industry').
Define the specific segment tightly.
Rate forces directionally — is the force strengthening or weakening over time? That matters as much as current intensity.
Avoid letting the most vocal person dominate each rating: get individual scores first, then discuss divergences.
Variations
Run a 'Six Forces' variant by adding a sixth force: complementors (companies whose products increase the value of your own). Combine with Scenario Planning to model how each force shifts under different future scenarios.
Where it fits
Frequently asked questions
When should I use Porter's Five Forces?â–¾
Use Porter's Five Forces when you want to: Market entry analysis; Competitive strategy workshops; Investment due diligence; Industry attractiveness assessment; Strategic planning off-sites.
How long does Porter's Five Forces take?â–¾
Porter's Five Forces typically takes 60–150 minutes.
How many participants does Porter's Five Forces work for?â–¾
Porter's Five Forces works best for groups of 3–20 participants.
What materials do I need for Porter's Five Forces?â–¾
To run Porter's Five Forces you will need: Porter's Five Forces template (printed or projected), sticky notes, markers, industry reports or competitive intelligence (optional).
How difficult is Porter's Five Forces to facilitate?â–¾
Porter's Five Forces is rated intermediate — some facilitation experience is helpful.
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Try it freeMethod descriptions on Workshop Weaver are original content written by our team, based on established facilitation practices. This method was inspired by work from Michael E. Porter, 'How Competitive Forces Shape Strategy', Harvard Business Review (1979).