Porter's Five Forces Porter's Five Forces is a business strategy framework developed by Michael Porter in 1979. It helps businesses understand how competitive an industry is and how profitable it can be over the long term. Porter's Five Forces The framework analyzes five competitive forces that influence every industry. The Five Forces 1. Rivalry Among Existing Competitors (Highest Impact) Competition between companies already operating in the market. Factors affecting rivalry: Number of competitors Market growth rate Product differentiation Brand loyalty Price competition Switching costs Exit barriers High rivalry example: Airlines Fast food Mobile telecom Low rivalry example: Utility companies Monopoly markets 2. Threat of New Entrants Measures how easy it is for new companies to enter the market. High threat when: Low startup cost Few regulations Easy access to suppliers Weak brand loyalty Technology is affordable Low threat when: High capital investment Strong pa...