## Definition of Porter's Five Forces Porter's Five Forces Framework is a [[product framework]] used to analyze the competitive environment of a product or industry. Framework developed by Michael Porter, a renowned business strategist, this framework identifies five forces that influence the competitive intensity and profitability of a market. ## Porter's Five Forces are: Threat of new entrants: This force assesses the ease with which new competitors can enter the market. High barriers to entry, such as high capital requirements, regulatory hurdles, or brand recognition, can deter new entrants and protect established players from competition. ### Bargaining power of suppliers This force examines the influence of suppliers on the industry. If suppliers have significant bargaining power, they can raise prices, affect quality, or reduce availability of inputs, thereby impacting the profitability of the industry. ### Bargaining power of buyers This force evaluates the power of customers to negotiate prices, demand better quality, or switch to substitutes. If buyers have high bargaining power, they can drive down profits and force companies to lower prices or improve offerings. ### Threat of substitutes This force analyzes the availability and attractiveness of substitutes for the product. If substitutes are plentiful and offer similar benefits at lower prices or better quality, they can erode the market share and pricing power of existing products. ### Rivalry among existing competitors This force measures the intensity of competition among existing players in the market. High rivalry can lead to price wars, aggressive marketing, or product innovation, which can benefit consumers but reduce profits for companies. By using Porter's Five Forces Framework, product managers can gain a holistic view of the competitive landscape, identify areas of strength and weakness, and develop strategies to enhance the product's value proposition, pricing, distribution, or branding. This framework can also help product managers anticipate and respond to changes in the market, such as new entrants, emerging technologies, or changing consumer preferences.