Porter's Five Forces - QuickMBA

A discussion of Porter's 5 Forces, including rivalry, the threat of substitutes, buyer power, supplier power, and barriers to entry.  QuickMBA / Strategy / Porter's5Forces Porter'sFiveForces AMODELFORINDUSTRYANALYSIS Themodelofpurecompetitionimpliesthatrisk-adjustedratesofreturnshouldbeconstantacrossfirmsandindustries.However,numerouseconomicstudieshaveaffirmedthatdifferentindustriescansustaindifferentlevelsofprofitability;partofthisdifferenceisexplainedbyindustrystructure. MichaelPorterprovidedaframeworkthatmodelsanindustryasbeinginfluencedbyfiveforces.Thestrategicbusinessmanagerseekingtodevelopanedgeoverrivalfirmscanusethismodeltobetterunderstandtheindustrycontextinwhichthefirmoperates. DiagramofPorter's5Forces   SUPPLIERPOWER Supplierconcentration Importanceofvolumetosupplier Differentiationofinputs Impactofinputsoncostordifferentiation Switchingcostsoffirmsintheindustry Presenceofsubstituteinputs Threatofforwardintegration Costrelativetototalpurchasesinindustry   THREATOFNEWENTRANTS BarrierstoEntry Absolutecostadvantages Proprietarylearningcurve Accesstoinputs Governmentpolicy Economiesofscale Capitalrequirements Brandidentity Switchingcosts Accesstodistribution Expectedretaliation Proprietaryproducts THREATOFSUBSTITUTES -Switchingcosts -Buyerinclinationto substitute -Price-performance trade-offofsubstitutes   BUYERPOWER Bargainingleverage Buyervolume Buyerinformation Brandidentity Pricesensitivity Threatofbackwardintegration Productdifferentiation Buyerconcentrationvs.industry Substitutesavailable Buyers'incentives DEGREEOFRIVALRY -Exitbarriers -Industryconcentration -Fixedcosts/Valueadded -Industrygrowth -Intermittentovercapacity -Productdifferences -Switchingcosts -Brandidentity -Diversityofrivals -Corporatestakes  I. Rivalry Inthetraditionaleconomicmodel,competitionamongrivalfirmsdrivesprofitstozero.Butcompetitionisnotperfectandfirmsarenotunsophisticatedpassivepricetakers.Rather,firmsstriveforacompetitiveadvantageovertheirrivals.Theintensityofrivalryamongfirmsvariesacrossindustries,andstrategicanalystsareinterestedinthesedifferences. Economistsmeasurerivalrybyindicatorsof industryconcentration.TheConcentrationRatio(CR)isonesuchmeasure.TheBureauofCensusperiodicallyreportstheCRformajorStandardIndustrialClassifications(SIC's).TheCRindicatesthepercentofmarketshareheldbythefourlargestfirms(CR'sforthelargest8,25,and50firmsinanindustryalsoareavailable).Ahighconcentrationratioindicatesthatahighconcentrationofmarketshareisheldbythelargestfirms-theindustryisconcentrated.Withonlyafewfirmsholdingalargemarketshare,thecompetitivelandscapeislesscompetitive(closertoamonopoly).Alowconcentrationratioindicatesthattheindustryischaracterizedbymanyrivals,noneofwhichhasasignificantmarketshare.Thesefragmentedmarketsaresaidtobecompetitive.Theconcentrationratioisnottheonlyavailablemeasure;thetrendistodefineindustriesintermsthatconveymoreinformationthandistributionofmarketshare. Ifrivalryamongfirmsinanindustryislow,theindustryisconsideredtobedisciplined.Thisdisciplinemayresultfromtheindustry'shistoryofcompetition,theroleofaleadingfirm,orinformalcompliancewithagenerallyunderstoodcodeofconduct.Explicitcollusiongenerallyisillegalandnotanoption;inlow-rivalryindustriescompetitivemovesmustbeconstrainedinformally.However,amaverickfirmseekingacompetitiveadvantagecandisplacetheotherwisedisciplinedmarket. Whenarivalactsinawaythatelicitsacounter-responsebyotherfirms,rivalryintensifies.Theintensityofrivalrycommonlyisreferredtoasbeingcutthroat,intense,moderate,orweak,basedonthefirms'aggressivenessinattemptingtogainanadvantage. Inpursuinganadvantageoveritsrivals,afirmcanchoosefromseveralcompetitivemoves: Changingprices-raisingorloweringpricestogainatemporaryadvantage. Improvingproductdifferentiation-improvingfeatures,implementinginnovationsinthemanufacturingprocessandintheproductitself. Creativelyusingchannelsofdistribution-usingverticalintegrationorusingadistributionchannelthatisnoveltotheindustry.Forexample,withhigh-endjewelrystoresreluctanttocarryitswatches,Timexmovedintodrugstoresandothernon-traditionaloutletsandcorneredthelowtomid-pricewatchmarket. Exploitingrelationshipswithsuppliers-forexample,fromthe1950'stothe1970'sSears,RoebuckandCo.dominatedtheretailhouseholdappliancemarket.Searssethighqualitystandardsandrequiredsupplierstomeetitsdemandsforproductspecificationsandprice. Theintensityofrivalryisinfluencedbythefollowingindustrycharacteristics: Alargernumberoffirmsincreasesrivalrybecausemorefirmsmustcompeteforthesamecustomersandresources.Therivalryintensifiesifthefirmshavesimilarmarketshare,leadingtoastruggleformarketleadership. Slowmarketgrowthcausesfirmstofightformarketshare.Inagrowingmarket,firmsareabletoimproverevenuessimplybecauseoftheexpandingmarket. Highfixedcostsresultinaneconomyofscaleeffectthatincreasesrivalry.Whentotalcostsaremostlyfixedcosts,thefirmmustproducenearcapacitytoattainthelowestunitcosts.Sincethefirmmustsellthislargequantityofproduct,highlevelsofproductionleadtoafightformarketshareandresultsinincreasedrivalry. Highstoragecostsorhighlyperishableproductscauseaproducertosellgoodsassoonaspossible.Ifotherproducersareattemptingtounloadatthesametime,competitionforcustomersintensifies. Lowswitchingcostsincreasesrivalry.Whenacustomercanfreelyswitchfromoneproducttoanotherthereisagreaterstruggletocapturecustomers. Lowlevelsofproductdifferentiationisassociatedwithhigherlevelsofrivalry.Brandidentification,ontheotherhand,tendstoconstrainrivalry. Strategicstakesarehighwhenafirmislosingmarketpositionorhaspotentialforgreatgains.Thisintensifiesrivalry. Highexitbarriersplaceahighcostonabandoningtheproduct.Thefirmmustcompete.Highexitbarrierscauseafirmtoremaininanindustry,evenwhentheventureisnotprofitable.Acommonexitbarrierisassetspecificity.Whentheplantandequipmentrequiredformanufacturingaproductishighlyspecialized,theseassetscannoteasilybesoldtootherbuyersinanotherindustry. LittonIndustries'acquisitionofIngallsShipbuildingfacilitiesillustratesthisconcept.Littonwassuccessfulinthe1960'swithitscontractstobuildNavyships.ButwhentheVietnamwarended,defensespendingdeclinedandLittonsawasuddendeclineinitsearnings.Asthefirmrestructured,divestingfromtheshipbuildingplantwasnotfeasiblesincesuchalargeandhighlyspecializedinvestmentcouldnotbesoldeasily,andLittonwasforcedtostayinadecliningshipbuildingmarket. Adiversityofrivalswithdifferentcultures,histories,andphilosophiesmakeanindustryunstable.Thereisgreaterpossibility formavericksandformisjudgingrival'smoves.Rivalryisvolatileandcanbeintense.Thehospitalindustry,forexample,ispopulatedbyhospitalsthathistoricallyarecommunityorcharitableinstitutions,byhospitalsthatareassociatedwithreligiousorganizationsoruniversities,andbyhospitalsthatarefor-profitenterprises.Thismixofphilosophiesaboutmissionhasleadoccasionallytofiercelocalstrugglesbyhospitalsoverwhowillgetexpensivediagnosticandtherapeuticservices.Atothertimes,localhospitalsarehighlycooperativewithoneanotheronissuessuchascommunitydisasterplanning. IndustryShakeout. Agrowingmarketandthepotentialforhighprofitsinducesnewfirmstoenteramarketandincumbentfirmstoincreaseproduction.Apointisreachedwheretheindustrybecomescrowdedwithcompetitors,anddemandcannotsupportthenewentrantsandtheresultingincreasedsupply.Theindustrymaybecomecrowdedifitsgrowthrateslowsandthemarketbecomessaturated,creatingasituationofexcesscapacitywithtoomanygoodschasingtoofewbuyers.Ashakeoutensues,withintensecompetition,pricewars,andcompanyfailures. BCGfounderBruceHendersongeneralizedthisobservationastheRuleofThreeandFour:astablemarketwillnothavemorethanthreesignificantcompetitors,andthelargestcompetitorwillhavenomorethanfourtimesthemarketshareofthesmallest.Ifthisruleistrue,itimpliesthat: Ifthereisalargernumberofcompetitors,ashakeoutisinevitable Survivingrivalswillhavetogrowfasterthanthemarket Eventualloserswillhaveanegativecashflowiftheyattempttogrow Allexceptthetwolargestrivalswillbelosers Thedefinitionofwhatconstitutesthe"market"isstrategicallyimportant. Whateverthemeritsofthisruleforstablemarkets,itisclearthatmarketstabilityandchangesinsupplyanddemandaffectrivalry.Cyclicaldemandtendstocreatecutthroatcompetition.Thisistrueinthedisposablediaperindustryinwhichdemandfluctuateswithbirthrates,andinthegreetingcardindustryinwhichtherearemorepredictablebusinesscycles. II.ThreatOfSubstitutes InPorter'smodel,substituteproductsrefertoproductsinotherindustries.Totheeconomist,athreatofsubstitutesexistswhenaproduct'sdemandisaffectedbythepricechangeofasubstituteproduct.Aproduct'spriceelasticityisaffectedbysubstituteproducts-asmoresubstitutesbecomeavailable,thedemandbecomesmoreelasticsincecustomershavemorealternatives.Aclosesubstituteproductconstrainstheabilityoffirmsinanindustrytoraiseprices. ThecompetitionengenderedbyaThreatofSubstitutecomesfromproductsoutsidetheindustry.Thepriceofaluminumbeveragecansisconstrainedbythepriceofglassbottles,steelcans,andplasticcontainers.Thesecontainersaresubstitutes,yettheyarenotrivalsinthealuminumcanindustry.Tothemanufacturerofautomobiletires,tireretreadsareasubstitute.Today,newtiresarenotsoexpensivethatcarownersgivemuchconsiderationtoretreadingoldtires.Butinthetruckingindustrynewtiresareexpensiveandtiresmustbereplacedoften.Inthetrucktiremarket,retreadingremainsaviablesubstituteindustry.Inthedisposablediaperindustry,clothdiapersareasubstituteandtheirpricesconstrainthepriceofdisposables. Whilethethreatofsubstitutestypicallyimpactsanindustrythroughpricecompetition,therecanbeotherconcernsinassessingthethreatofsubstitutes.ConsiderthesubstitutabilityofdifferenttypesofTVtransmission:localstationtransmissiontohomeTVantennasviatheairwaysversustransmissionviacable,satellite,andtelephonelines.Thenewtechnologiesavailableandthechangingstructureoftheentertainmentmediaarecontributingtocompetitionamongthesesubstitutemeansofconnectingthehometoentertainment.ExceptinremoteareasitisunlikelythatcableTVcouldcompetewithfreeTVfromanaerialwithoutthegreaterdiversityofentertainmentthatitaffordsthecustomer. III.BuyerPower Thepowerofbuyersistheimpactthatcustomershaveonaproducingindustry.Ingeneral,whenbuyerpowerisstrong,therelationshiptotheproducingindustryisneartowhataneconomisttermsamonopsony-amarketinwhichtherearemanysuppliersandonebuyer. Undersuchmarketconditions,thebuyersetstheprice.Inrealityfewpuremonopsoniesexist,butfrequentlythereissomeasymmetrybetweenaproducingindustryandbuyers.Thefollowingtablesoutlinesomefactorsthatdeterminebuyerpower. BuyersarePowerfulif: Example Buyersareconcentrated-thereareafewbuyerswithsignificantmarketshare DODpurchasesfromdefensecontractors Buyerspurchaseasignificantproportionofoutput-distributionofpurchasesoriftheproductisstandardized CircuitCityandSears'largeretailmarketprovidespoweroverappliancemanufacturers Buyerspossessacrediblebackwardintegrationthreat-canthreatentobuyproducingfirmorrival Largeautomanufacturers'purchasesoftires   BuyersareWeakif: Example Producersthreatenforwardintegration-producercantakeoverowndistribution/retailing Movie-producingcompanieshaveintegratedforwardtoacquiretheaters Significantbuyerswitchingcosts-productsnotstandardizedandbuyercannoteasilyswitchtoanotherproduct IBM's360systemstrategyinthe1960's Buyersarefragmented(many,different)-nobuyerhasanyparticularinfluenceonproductorprice Mostconsumerproducts Producerssupplycriticalportionsofbuyers'input-distributionofpurchases Intel'srelationshipwithPCmanufacturers IV.SupplierPower Aproducingindustryrequiresrawmaterials-labor,components,andothersupplies.Thisrequirementleadstobuyer-supplierrelationshipsbetweentheindustryandthefirmsthatprovideittherawmaterialsusedtocreateproducts.Suppliers,ifpowerful,canexertaninfluenceontheproducingindustry,suchassellingrawmaterialsatahighpricetocapturesomeoftheindustry'sprofits.Thefollowingtablesoutlinesomefactorsthatdeterminesupplierpower. SuppliersarePowerfulif: Example Credibleforwardintegrationthreatbysuppliers BaxterInternational,manufacturerofhospitalsupplies,acquiredAmericanHospitalSupply,adistributor Suppliersconcentrated Drugindustry'srelationshiptohospitals Significantcosttoswitchsuppliers Microsoft'srelationshipwithPCmanufacturers CustomersPowerful  Boycottofgrocerystoressellingnon-unionpickedgrapes   SuppliersareWeakif: Example Manycompetitivesuppliers-productisstandardized Tireindustryrelationshiptoautomobilemanufacturers Purchasecommodityproducts Grocerystorebrandlabelproducts Crediblebackwardintegrationthreatbypurchasers Timberproducersrelationshiptopapercompanies Concentratedpurchasers Garmentindustryrelationshiptomajordepartmentstores CustomersWeak Travelagents'relationshiptoairlines V.ThreatofNewEntrantsandEntryBarriers Itisnotonlyincumbentrivalsthatposeathreattofirmsinanindustry;thepossibilitythatnewfirmsmayentertheindustryalsoaffectscompetition.Intheory,anyfirmshouldbeabletoenterandexitamarket,andiffreeentryandexitexists,thenprofitsalwaysshouldbenominal.Inreality,however,industriespossesscharacteristicsthatprotectthehighprofitlevelsoffirmsinthemarketandinhibitadditionalrivalsfromenteringthemarket.Thesearebarrierstoentry. Barrierstoentryaremorethanthenormalequilibriumadjustmentsthatmarketstypicallymake.Forexample,whenindustryprofitsincrease,wewouldexpectadditionalfirmstoenterthemarkettotakeadvantageofthehighprofitlevels,overtimedrivingdownprofitsforallfirmsintheindustry.Whenprofitsdecrease,wewouldexpectsomefirmstoexitthemarketthusrestoringamarketequilibrium.Fallingprices,ortheexpectationthatfuturepriceswillfall,detersrivalsfromenteringamarket.Firmsalsomaybereluctanttoentermarketsthatareextremelyuncertain,especiallyifenteringinvolvesexpensivestart-upcosts.Thesearenormalaccommodationstomarketconditions.Butiffirmsindividually(collectiveactionwouldbeillegalcollusion)keeppricesartificiallylowasastrategytopreventpotentialentrantsfromenteringthemarket,suchentry-deterringpricingestablishesabarrier. Barrierstoentryareuniqueindustrycharacteristicsthatdefinetheindustry.Barriersreducetherateofentryofnewfirms,thusmaintainingalevelofprofitsforthosealreadyintheindustry.Fromastrategicperspective,barrierscanbecreatedorexploitedtoenhanceafirm'scompetitiveadvantage.Barrierstoentryarisefromseveralsources: Governmentcreatesbarriers. Althoughtheprincipalroleofthegovernmentinamarketistopreservecompetitionthroughanti-trustactions,governmentalsorestrictscompetitionthroughthegrantingofmonopoliesandthroughregulation.Industriessuchasutilitiesareconsiderednaturalmonopoliesbecauseithasbeenmoreefficienttohaveoneelectriccompanyprovidepowertoalocalitythantopermitmanyelectriccompaniestocompeteinalocalmarket.Torestrainutilitiesfromexploitingthisadvantage,governmentpermitsamonopoly,butregulatestheindustry.Illustrativeofthiskindofbarriertoentryisthelocalcablecompany.Thefranchisetoacableprovidermaybegrantedbycompetitivebidding,butoncethefranchiseisawardedbyacommunityamonopolyiscreated.Localgovernmentswerenoteffectiveinmonitoringpricegougingbycableoperators,sothefederalgovernmenthasenactedlegislationtoreviewandrestrictprices. Theregulatoryauthorityofthegovernmentinrestrictingcompetitionishistoricallyevidentinthebankingindustry.Untilthe1970's,themarketsthatbankscouldenterwerelimitedbystategovernments.Asaresult,mostbankswerelocalcommercialandretailbankingfacilities. Bankscompetedthroughstrategiesthatemphasizedsimplemarketingdevicessuchasawardingtoasterstonewcustomersforopeningacheckingaccount.Whenbankswerederegulated,bankswerepermittedtocrossstateboundariesandexpandtheirmarkets.Deregulationofbanksintensifiedrivalryandcreateduncertaintyforbanksastheyattemptedtomaintainmarketshare.Inthelate1970's,thestrategyofbanksshiftedfromsimplemarketingtacticstomergersandgeographicexpansionasrivalsattemptedtoexpandmarkets. Patentsandproprietaryknowledgeservetorestrictentryintoanindustry.Ideasandknowledgethatprovidecompetitiveadvantagesaretreatedasprivatepropertywhenpatented,preventingothersfromusingtheknowledgeandthuscreatingabarriertoentry.EdwinLandintroducedthePolaroidcamerain1947andheldamonopolyintheinstantphotographyindustry.In1975,Kodakattemptedtoentertheinstantcameramarketandsoldacomparablecamera.Polaroidsuedforpatentinfringementandwon,keepingKodakoutoftheinstantcameraindustry. Assetspecificityinhibitsentryintoanindustry.Assetspecificityistheextenttowhichthefirm'sassetscanbeutilizedtoproduceadifferentproduct.Whenanindustryrequireshighlyspecializedtechnologyorplantsandequipment,potentialentrantsarereluctanttocommittoacquiringspecializedassetsthatcannotbesoldorconvertedintootherusesiftheventurefails.Assetspecificityprovidesabarriertoentryfortworeasons:First,whenfirmsalreadyholdspecializedassetstheyfiercelyresisteffortsbyothersfromtakingtheirmarketshare.Newentrantscananticipateaggressiverivalry.Forexample,KodakhadmuchcapitalinvestedinitsphotographicequipmentbusinessandaggressivelyresistedeffortsbyFujitointrudeinitsmarket.Theseassetsarebothlargeandindustryspecific.Thesecondreasonisthatpotentialentrantsarereluctanttomakeinvestmentsinhighlyspecializedassets. Organizational(Internal)EconomiesofScale.ThemostcostefficientlevelofproductionistermedMinimumEfficientScale(MES).Thisisthepointatwhichunitcostsforproductionareatminimum-i.e.,themostcostefficientlevelofproduction.IfMESforfirmsinanindustryisknown,thenwecandeterminetheamountofmarketsharenecessaryforlowcostentryorcostparitywithrivals.Forexample,inlongdistancecommunicationsroughly10%ofthemarketisnecessaryforMES.Ifsalesforalongdistanceoperatorfailtoreach10%ofthemarket,thefirmisnotcompetitive. Theexistenceofsuchaneconomyofscalecreatesabarriertoentry.ThegreaterthedifferencebetweenindustryMESandentryunitcosts,thegreaterthebarriertoentry.SoindustrieswithhighMESdeterentryofsmall,start-upbusinesses.TooperateatlessthanMEStheremustbeaconsiderationthatpermitsthefirmtosellatapremiumprice-suchasproductdifferentiationorlocalmonopoly. Barrierstoexitworksimilarlytobarrierstoentry.Exitbarrierslimittheabilityofafirmtoleavethemarketandcanexacerbaterivalry- unabletoleavetheindustry,afirmmustcompete.Someofanindustry'sentryandexitbarrierscanbesummarizedasfollows: EasytoEnterifthereis: Commontechnology Littlebrandfranchise Accesstodistributionchannels Lowscalethreshold DifficulttoEnterifthereis: Patentedorproprietaryknow-how Difficultyinbrandswitching Restricteddistributionchannels Highscalethreshold EasytoExitifthereare: Salableassets Lowexitcosts Independentbusinesses DifficulttoExitifthereare: Specializedassets Highexitcosts Interrelatedbusinesses DYNAMICNATUREOFINDUSTRYRIVALRY Ourdescriptiveandanalyticmodelsofindustrytendtoexaminetheindustryatagivenstate.Thenatureandfascinationofbusinessisthatitisnotstatic.Whilewearepronetogeneralize,forexample,listGM,Ford,andChryslerasthe"Big3"andassumetheirdominance,wealsohaveseentheautomobileindustrychange.Currently,theentertainmentandcommunicationsindustriesareinflux.Phonecompanies,computerfirms,andentertainmentaremergingandformingstrategicalliancesthatre-maptheinformationterrain.Schumpeterand,morerecently,Porterhaveattemptedtomovetheunderstandingofindustrycompetitionfromastaticeconomicorindustryorganizationmodeltoanemphasisontheinterdependenceofforcesasdynamic,orpunctuatedequilibrium,asPortertermsit. InSchumpeter'sandPorter'sviewthedynamismofmarketsisdrivenbyinnovation.Wecanenvisiontheseforcesatworkasweexaminethefollowingchanges: Top10USIndustrialFirmsbySales1917-1988   1917 1945 1966 1983 1988 1 USSteel GeneralMotors GeneralMotors Exxon GeneralMotors 2 Swift USSteel Ford  GeneralMotors Ford 3 Armour StandardOil-NJ StandardOil-NJ(Exxon) Mobil Exxon 4 AmericanSmelting USSteel GeneralElectric Texaco IBM 5 StandardOil-NJ BethlehemSteel Chrysler Ford  GeneralElectric 6 BethlehemSteel Swift  Mobil  IBM Mobil 7 Ford  Armour Texaco Socal(Oil) Chrysler 8 DuPont  Curtiss-Wright USSteel DuPont Texaco 9 AmericanSugar Chrysler IBM  GulfOil DuPont 10 GeneralElectric Ford  GulfOil StandardOilofIndiana PhilipMorris 10LargestUSFirmsbyAssets,1909and1987   1909 1987 1 USSTEEL GM(Notlistedin1909) 2 STANDARDOIL,NJ(Now,EXXON#3) SEARS(1909=45) 3 AMERICANTOBACCO(Now,AmericanBrands#52) EXXON(StandardOiltrustbrokenupin1911) 4 AMERICANMERCANTILEMARINE(RenamedUSLines;acquiredbyKidde,Inc.,1969;soldtoMcLeanIndustries,1978;bankruptcy,1986 IBM(Ranked68,1948) 5 INTERNATIONALHARVESTER(RenamedNavistar#182);divestedfarmequipment FORD(Listedin1919) 6 ANACONDACOPPER(acquiredbyARCOin1977) MOBILOIL 7 USLEATHER(Liquidatedin1935) GENERALELECTRIC(1909=16) 8 ARMOUR(Mergedin1968withGeneralHost;in1969byGreyhound;1983soldtoConAgra) CHEVRON(Notlistedin1909) 9 AMERICANSUGARREFINING(RenamedAMSTAR.In1967=320) Leveragedbuyoutandsoldinpieces) TEXACO(1909=91) 10 PULLMAN,INC (AcquiredbyWheelabratorFrye,1980;spun-offasPullman-Peabody,1981;1984soldtoTrinityIndustries) DUPONT(1909=29) GENERICSTRATEGIESTOCOUNTERTHEFIVEFORCES Strategycanbeformulatedonthreelevels: corporatelevel businessunitlevel functionalordepartmentallevel. Thebusinessunitlevelistheprimarycontextofindustryrivalry.MichaelPorteridentifiedthreegenericstrategies(costleadership,differentiation,andfocus)thatcanbeimplementedatthebusinessunitleveltocreateacompetitiveadvantage.Thepropergenericstrategywillpositionthefirmtoleverageitsstrengthsanddefendagainsttheadverseeffectsofthefiveforces. RecommendedReading Porter,MichaelE.,CompetitiveStrategy:TechniquesforAnalyzingIndustriesandCompetitors CompetitiveStrategyisthebasisformuchofmodernbusinessstrategy.Inthisclassicwork,MichaelPorterpresentshisfiveforcesandgenericstrategies,thendiscusseshowtorecognizeandactonmarketsignalsandhowtoforecasttheevolutionofindustrystructure.Hethendiscussescompetitivestrategyforemerging,mature,declining,andfragmentedindustries.Thelastpartofthebookcoversstrategicdecisionsrelatedtoverticalintegration,capacityexpansion,andentryintoanindustry.Thebookconcludeswithanappendixonhowtoconductanindustryanalysis.   QuickMBA / Strategy / Porters5Forces Home  |  SiteMap  |  About  |  Contact  |  Privacy  |  Reprints  |  UserAgreement Thearticlesonthiswebsitearecopyrightedmaterialandmaynotbereproduced, storedonacomputerdisk,republishedonanotherwebsite,ordistributedinany formwithoutthepriorexpresswrittenpermissionofQuickMBA.com.   Accounting | BusinessLaw | Economics | Entrepreneurship | Finance | Management | Marketing | Operations | Statistics | Strategy SearchQuickMBA