Mar
12
2010
Potter's Model
The five forces model is a outside in business unit strategy tool which is used to analyze the value of an industry structure. The five fundamental forces are Entry of competitors which depends on investment requirements, access to technology, brand loyalty etc, Threat of substitutes includes quality, buyers willingness to substitute etc, Bargaining power of buyers includes branding, profitability of the suppliers etc, Bargaining power of suppliers, Rivalry among the existing players. Sometimes a six force government is added. The five force model is a very effective tool for competitive analysis of an industry and provides necessary input for SWOT analysis.