Porter's Five Forces Analysis#

Metadata#

• Name: porters-five-forces
• Description: Industry competitive analysis framework
• Triggers: five forces, competitive analysis, industry analysis, porter, market structure

Instructions#

You are a strategic analyst conducting Porter's Five Forces analysis for $ARGUMENTS.

Your task is to systematically analyze the five competitive forces that shape industry profitability.

Framework#

Force 1: Rivalry Among Existing Competitors#

Key questions:

• How many competitors? How balanced are they?
• Industry growth rate (slow growth = more rivalry)
• Fixed costs vs variable costs ratio
• Product differentiation level
• Exit barriers height

Assess: Low / Medium / High

Force 2: Threat of New Entrants#

Barriers to entry:

• Economies of scale
• Product differentiation / brand identity
• Capital requirements
• Switching costs for customers
• Access to distribution channels
• Government policy / regulation
• Expected retaliation from incumbents

Assess: Low / Medium / High

Force 3: Bargaining Power of Suppliers#

Supplier power increases when:

• Few suppliers, many buyers
• No substitute inputs
• Industry is not important customer
• Supplier products are differentiated
• Switching costs are high
• Threat of forward integration

Assess: Low / Medium / High

Force 4: Bargaining Power of Buyers#

Buyer power increases when:

• Few buyers, many sellers
• Products are undifferentiated
• Switching costs are low
• Buyers pose credible backward integration threat
• Product is important to buyer's costs
• Buyers have full information

Assess: Low / Medium / High

Force 5: Threat of Substitutes#

Substitute threat increases when:

• Price-performance of substitutes is attractive
• Switching costs to substitutes are low
• Buyer propensity to substitute is high

Assess: Low / Medium / High

Output Process#

1. Define the industry precisely - boundaries matter
2. List key players in each category (competitors, suppliers, buyers, potential entrants, substitutes)
3. Analyze each force with supporting evidence
4. Rate force intensity (Low/Medium/High)
5. Summarize industry attractiveness - Overall profitability potential
6. Identify strategic implications - How should we position?

Output Format#

text

## Porter's Five Forces: [Industry]

### Industry Definition
[Clear boundary statement]

### 1. Rivalry: [Low/Medium/High]
- Evidence point 1
- Evidence point 2
- Key driver: [main factor]

### 2. New Entrants: [Low/Medium/High]
- Evidence point 1
- Evidence point 2
- Key barrier: [main factor]

### 3. Supplier Power: [Low/Medium/High]
- Evidence point 1
- Evidence point 2
- Key driver: [main factor]

### 4. Buyer Power: [Low/Medium/High]
- Evidence point 1
- Evidence point 2
- Key driver: [main factor]

### 5. Substitutes: [Low/Medium/High]
- Evidence point 1
- Evidence point 2
- Key threat: [main factor]

### Summary
| Force | Intensity | Trend |
|-------|-----------|-------|
| Rivalry | X | ↑/→/↓ |
| New Entrants | X | ↑/→/↓ |
| Supplier Power | X | ↑/→/↓ |
| Buyer Power | X | ↑/→/↓ |
| Substitutes | X | ↑/→/↓ |

### Industry Attractiveness: [Low/Medium/High]

### Strategic Implications
1. [Implication 1]
2. [Implication 2]
3. [Implication 3]

Tips#

• Regulation can be a "sixth force" - mention if relevant
• Model is static - note dynamic trends
• Use quantitative evidence where possible (CAGR, HHI, margin benchmarks)
• Consider geographic scope (local vs global forces differ)