The Category Management Handbook

Activity 17Competition analysis

Porter’s five forces

Figure 3.5 Competition analysis

Source: adapted from Porter (1980)

Overview

Michael Porter (1980) originally developed the five-forces model as a way of evaluating the attractiveness (profit potential) of an industry. He described his analysis as being concerned with the ‘forces driving industry competition’.

This model can aid the category strategy-development process. Assessing all facets of potential supply competition provides a rounded view when deciding upon what action to take in order to gain a competitive advantage.

Elements

In any industry, whether it is domestic or international, ...