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A graphical representation of Porter's five forces. Porter's Five Forces Framework is a method of analysing the competitive environment of a business. It draws from industrial organization (IO) economics to derive five forces that determine the competitive intensity and, therefore, the attractiveness (or lack thereof) of an industry in terms of its profitability.
He originally developed the Porter's Five Forces in 1979 which is still widely used as a model to analyse the industry and to estimate whether it would be profitable and ideal enough to enter the industry after carefully examining the bargaining power of buyers, bargaining power of suppliers, threat of new entrants, competition among existing ...
[1] [2] The model is an extension of the Porter's five forces model proposed by Michael Porter in his 1979 article published in the Harvard Business Review "How Competitive Forces Shape Strategy". The sixth force was proposed in the mid-1990s. [3]
Porter's model is not just for businesses, but can also be applied to a country to help gain insight into creating a competitive advantage in the global market. [13] The ultimate purpose of Porter's five forces model is to help businesses compare and analyze their profitability and position with the industry against indirect and direct competition.
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A value chain is a progression of activities that a business or firm performs in order to deliver goods and services of value to an end customer.The concept comes from the field of business management and was first described by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.
English: A diagram of Michael Porter's Five Forces based on an image from Porter M. E., Competitive Advantage: Creating and Sustaining Superior Performance (New York: Free Press, 1985), page 5. Date 24 May 2014, 13:29:01