The Porter Analysis

Introduction To perform the Industry Analysis it is better to follow Michael Porter's five forces model. This analysis framework was created so that it helps managers in their task to analyze competitive forces to the company. (Hill & Jones 80) This model is only one of the models that can be used for this task but it is one of the more popular models. The five forces that we will have to look at for …

…model are all connected in some way. The stronger each force is the more the industry in which the company is in is competitive. When an industry is more competitive this leads to lower prices due to price wars and ultimately lower rate of return. One of the limitations to this way of looking at industry analysis is that the Five Forces model looks at an industry as a whole instead of each individual company.