What is Porter's Five Forces? is it Harry Porter?

Hi all.✌

Okay first of all, 

let me straighten things out.

Porter's Five Forces is not a Harry Porter.

and far from it.

It is one of the strategic management & operation that the company must aware in order to survive for a long-term in the industry.

so what it is then?

'Porter's 5 Forces'

• Named after Michael E. Porter of Harvard University
• Identifies and analyzes five competitive forces that shape every industry
• Helps determine an industry's weaknesses and strengths.
• The five forces that shape industry competition are:

1. Competitive Rivalry Among Existing Firms

The importance of this force is the number of competitors and their ability to threaten a company. The larger the number of competitors, along with the number of equivalent products and services they offer, dictates the power of a company. Suppliers and buyers seek out a company's competition if they are unable to receive a suitable deal.

2. Threat of New Entrants

A company's power is also affected by the force of new entrants into its market. The less money and time it costs for a competitor to enter a company's market and be an effective competitor, the more a company's position may be significantly weakened😟.

3. Bargaining Power of Suppliers

This force addresses how easily suppliers can drive up the price of goods and services. It is affected by the number of suppliers of key aspects of a good or service, how unique these aspects are and how much it would cost a company to switch from one supplier to another. The fewer number of suppliers, and the more a company depends upon a supplier, the more power a supplier holds.

4. Bargaining Power of Buyers

This specifically deals with the ability customers have to drive prices down. It is affected by how many buyers, or customers, a company has, how significant each customer is and how much it would cost a customer to switch from one company to another. The smaller and more powerful a client base, the more power it holds.

5. Threat of Substitute Products or Services

Competitor substitutions that can be used in place of a company's products or services pose a threat😈. For example, if customers rely on a company to provide a tool or service that can be substituted with another tool or service or by performing the task manually, and this substitution is fairly easy and of low cost, a company's power can be weakened😟.