Industry Analysis

A look at Porter's five forces from Purdue

"Michael Porter has identified five forces that are widely used to
assess the structure of any industry. Porter’s five forces are the:
• Bargaining power of suppliers,
• Bargaining power of buyers,
• Threat of new entrants,
• Threat of substitutes, and
• Rivalry among competitors.

Together, the strength of the five forces determines the profit potential in an industry by influencing the prices, costs, and required investments of businesses—the elements of return on investment"

Also a quick summary of how to do industry analysis from Philadelphia University:

"In order to assess the current strategy of a company, and its appropriateness and potential for success, you must understand the dynamics of the industry in which the company competes. While we often take for granted that this is easy to do, it takes a great deal of thought and analysis. In Michael Porter’s words, “the essence of formulating competitive strategy is relating a company to its environment.” (Porter 3) Obviously, this means that you must thoroughly understand the company and its industry, as well as the outside environmental forces that affect the industry, in order to be successful in this pursuit."

Chris R will also be providing us more on this topic.