Framework: Five Forces Model
Core Question: Is an industry attractive (i.e. yields profit for incumbents)?
Key Application Steps:
- Examine the various fundamental "subforces" in the five forces
- Examine the various fundamental “subforces” in the five forces
- For a particular industry, determine which subforces are particularly important in understanding industry profitability
- Identify the subforces that are amenable to change by your firm and consider the costs and benefits of changing them
Comparisons with other concepts and frameworks:
- SWOT – 5 forces focuses our attention on the most important opportunities and threats in an industry (OT)
Illustrative Decision Contexts:
- Should I enter into this industry?
- Should I start a new business in this industry? -Is it appropriate to exit this industry?
