Guidelines for applying Porter’s five forces framework: a set of industry analysis templates

This paper provides a practical yet comprehensive set of templates for applying Michael Porter’s five forces framework for industry analysis. The industry analysis templates described in this paper retain the comprehensiveness of Porter’s framework but in a format much more student/manager-oriented using graphics, visual cues, a uniform structure, and straightforward descriptions of concepts. Managers, analysts, students, and others wanting robust industry analysis are provided with a comprehensive, structured, and practical set of templates to use in assessing an industry using the five forces framework.

Guidelines for applying Porter’s
five forces framework: a set
of industry analysis templates
Michael E.Dobbs
Department of Management, Eastern Illinois University,
Charleston, Illinois, USA
Abstract
Purpose – The purpose ofthis paperis to provide practitioners and students a practicalyet
comprehensive setof templates for applying MichaelPorter’s five forces framework for industry
analysis.
Design/methodology/approach – Based on experiences with practicing managers, small busines
owners,industry analysts,academics,and students,a set of industry analysistemplatesthat
systematically guides an analyst through a comprehensive assessment of the five forces is pre
with the following:copies of the templates themselves,descriptions of their structure and use,an
exampleof a completed template(spectatorsports industry),and a discussion ofpossible
modifications and extensions.
Findings – The industry analysis templates described in this paper retain the comprehensivenes
Porter’s framework but in a format much more student/manager-oriented using graphics, visua
a uniform structure,and straightforward descriptions of concepts.Template users show evidence of
deeper strategic insights and have a sophisticated tool for future analysis.
Practical implications – Managers, analysts, students, and others wanting robust industry analy
are provided with a comprehensive,structured,and practicalset of templates to use in assessing an
industry using the five forces framework.
Originality/value – Leading strategicmanagementtexts and other sourcesprovide no
comprehensive,systematic,and robust format for conducting a five forces analysis of an industry.
The setof industry analysis templates described in this paperprovides a visually compelling,
user-friendly format that can assist those analyzing industries gain important strategic insights
only into industry drivers,but also important competitive advantages for individual firms.
Keywords Strategic management, Industry analysis, Five forces framework, Sport industry anal
Teaching tools, Templates
Paper type Conceptual paper
In 1980,MichaelPorterpublished Competitive Strategy,a work thatshaped the
thinking of a generation of academics and managers (Crowther, 2008; Magretta
Included in that foundational text (the first chapter, in fact) was Porter’s descrip
“five forces” that shape the structure of all industries and in large part establish
rules of competition and the root causes of profitability within an industry (Porte
2008).The five forces are the threats posed by competitive rivalry,powerful buyers,
powerfulsuppliers,potentialnew entrants,and substitute products.According to
Porter (1980,p.3),“the collective strength of the forces determines the ultimate pro
potential in the industry”. But of more interest to Porter, as emphasized in his u
the five forces in 2008,is the potential to use the five forces framework to understan
strategic implications for individual firms within an industry.
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1059-5422.htm
Competitiveness Review
Vol.24 No.1,2014
pp.32-45
q Emerald Group Publishing Limited
1059-5422
DOI 10.1108/CR-06-2013-0059
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Challenges in using the five forces
The practicalapplication ofthe five forcesframework,however,has been more
challenging. Porter (2008) himself admits as much and describes common misapplications
of the framework.Magretta (2012),Allio and Fahey (2012)and Lee et al.(2012)also
describe managerial difficulties. While working with practicing managers, small business
owners,MBA and undergraduate business students,and otheracademics,I have
witnessed many of the same things.The following challenges in using the five forces
framework are taken from Porter (2008), Magretta (2012) and my own observations.
Lack of depth
Many people only understand the five forces framework and its use in an inordinately
shallow way.At best,this leads to incomplete,inaccurate,and unhelpful analysis.At
worst,it can lead to misanalysis,poor decision making,and disastrous organizational
outcomes. Those of us in academia bear a good deal of the blame when it comes to a lack
of depth in teaching students about the concepts and usage of the five forces framework.
This begins with textbook coverage.I surveyed ten leading (Napshin,2010)strategic
management textbooks and catalogued the coverage of the five forces in each (Table I).
The number of pages devoted to the five forces framework ranges from four to 21 pages.
Only two of the textbooks provide in-depth descriptions, explanations, and applications
(Thompson et al.,2012;Barney,2011).Most textbooks summarize the basic concepts,
reprint or adapt Porter’s graphical depiction of the framework,and provide examples
from various industries. Two other textbooks (Wheelen and Hunger, 2012; David, 2011)
provide only four pages ofcoverage,diluting the power and potentialvalue ofthe
framework considerably.Unless students read one of the two textbooks with in-depth
coverage ofthe five forces and have an instructorwho can comprehensively and
effectively explain the framework, most will grasp only a superficial familiarity with five
Author(s) Title Ed. q
Pages of five forces
coverage
Barney Gaining and Sustaining Competitive
Advantage
4 2011 21
David Strategic Management: Concepts and
Cases
13 2011 4
Dess,Lumpkin,Eisner and
McNamara
Strategic Management: Text and
Cases
6 2012 11
Hill and Jones Strategic Management: An
Integrated Approach
10 2013 11
Hitt, Ireland and HoskissonStrategic Management:
Competitiveness & Globalization
10 2013 8
Marcus Management Strategy: Achieving
Sustained Competitive Advantage
2 2011 8
Pearce and Robinson Strategic Management: Planning for
Domestic and GlobalCompetition
13 2013 7
Rothaermel Strategic Management: Concepts and
Cases
1 2013 8
Thompson,Peteraf,
Gamble and Strickland
Crafting and Executing Strategy: The
Quest for Competitive Advantage
18 2012 18
Wheelen and Hunger Strategic Management and Business
Policy: Toward GlobalSustainability
13 2012 4
Table I.
Five forces coverage
in leading strategic
management textbooks
Porter’s five
forces
framework
33

forcesterminology.When thesestudentsgraduateand becomemanagers,small
business owners,and/or entrepreneurs,any industry analysis using the five forces
framework will be crippled by its lack of depth.The restoration of depth of analysis is
one of the purposes of the templates.
Lack of structured analysis
Porter (2008) laments the lack of quantitative measures used in typical applicat
the five forces framework and the devolution of the analysis into a series of qua
lists. These types of assessments of industry conditions are frequently rather ar
and make for poor substitutes for the rigor originally outlined and prescribed by
Porter.However,the presentation of the framework in Competitive Strategy may h
played a significant role in the development of this particular problem in applyin
framework for two reasons. First, in the original explanation of the framework, P
provides dozens,if not hundreds of examples of the five forces at work in a wide
variety ofindustries;but in only very rare instances does he provide quantitative
details of the examples. Second, the original description of the five forces is, in
a list.Granted,the list is not simple,but there are extensive lists of the sources of
threats within the five forces.Users of the framework have naturally taken their cues
from Porter, and following his lead have used lists and largely qualitative assess
of the five forces. It is the frequent arbitrary nature of five forces analyses that m
significantly diminished through a more structured approach to the implementa
of the framework which is what the templates are designed to provide.
Lack of strategic insight
Perhaps Porter’s (2008) biggest disappointment in the misapplication of the five
framework is the perception thatthe framework is primarily a toolto assess the
attractiveness levels of industries rather than gain strategic insight as to how a
can competemoreeffectively within itsindustry.The primary purposeof the
framework is the latter; however, tying the analysis to specific strategic action i
challenging.There are many contingency factors to consider (e.g.stage of industry
cycle) so that universal guidelines regarding actions to take given certain threat
are not advisable.In Competitive Strategy,Porter’s links between the five forces and
specific strategic actions are provided throughout much of the latter parts of the
and are not in a single place which would make them more accessible and likely
seen and/or used. While this placement is understandable and warranted, it forc
user ofthe framework to be more proactive and perceptive in drawing actionable
conclusions from his/herfive forces analysis.The templates are designed to aid
analysts with this aspect of using the framework,as well.
Millennialgeneration preferences
Another factor affecting how students process and apply the five forces framew
be the generation to which they belong. As of the 2010s, traditional college-age
are classified as Millennials,or membersof Generation-Y.While people in this
generation are very media-conscious and familiar with how technology contribu
increasingly complex environment (Considine et al., 2009), they also long for th
thatauthority and structure bring ( Jonas-Dwyer and Pospisil,2004;Moore,2007).
In addition, they expect high levels of service,low levels of “busy work,” and will not
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hesitate to voice their frustrations or dissatisfaction when those expectations are not met
(Black,2010;Eisner,2011).The templates provide the structure desired by these
Millennials and allow them to spend more time on analysis and less on formatting
leading to higher overall levels of satisfaction with the education process.
Five forces templates
The challenges identified by Porter in applying the five forces framework have certainly
been observed by others.Any instructor teaching a strategic management course or a
consultant working with clients has witnessed the same issues.But in an intensive,
professionalMBA program in which students have a strong desire to take Monday
evening’s principles and bring them to bear on Tuesday morning’s business problems,
the challenges to proper and effective application of the five forces framework comes into
much sharper focus.It was in such an environment that I made my first rudimentary
attempts at developing a guide to help managers and students apply the five forces
framework to their companies. Over the course of time, I continued to refine the emerging
setof templates as Iinteracted with differenttypes ofstudents,consulting clients,
academics, and professional industry analysts. My students and I used the templates to
analyze large,small,and entrepreneurialbusinesses;government agencies;nonprofit
and charitable organizations,and other types of organizations.
As the templates improved,students’strategic insightimproved.Ratherthan
exhibiting a superficialfamiliarity with terminology like switching costs and exit
barriers,students and professionals using the templates seemed to have a deeper
understanding of the underpinnings of industry structure.This translated into more
nuanced recognition and exploitation of competitive industry dynamics.Granted,not
all users of the templates have become proficient in the application of the five forces
framework – far from itin many cases.However,in my experience,each ofthe
challenges described earlier regarding the application of the five forces framework is
lessened significantly when these templates are used. The latest versions of these five
forces templates are provided in Appendix 1.
As to the order in which the five forces are presented in the templates (competitive
rivalry,buyer power,supplier power,new entrants,and substitutes),there are two
primary reasons for the order I decided to use.First,Porter presents them in different
orders himself, implying there is no correct order. In 1980, he uses the following order:
new entrants,competitive rivalry,substitutes,buyer power,and supplier power.In
2008,he presented them in a differentorder:new entrants,supplier power,buyer
power,substitutes,and competitive rivalry.
Second,by trialand error,I have found this particular order most effective.My
experience with MBA and undergraduate students alike is that they are most familiar
with concepts regarding competitive rivalry. They understand direct competition from
previous business classes as wellas life experiences.Therefore,I place competitive
rivalry as the firstforce to examine in an attemptto startwith the mostfamiliar
concepts.The second and third forces are buyer and supplier power,in that order.
Typically,students and practicing managers are familiar with distribution channels
and supply chain issues, so these two forces are not as challenging to grasp. The fourth
force is the threat of new entrants.This is not a force some students and managers
have thoughtabout beforein much depth,so it is placedfourth so that
students/managers can have some momentum upon which to build.And finally,the
Porter’s five
forces
framework
35

conceptof substitutes,while extremely valuable,is frequently unknown to many
students/managers.In my experience,I have found it best to save this force for last.
Although thissometimesincreasesthe likelihood thatstudentsstruggling with
comprehension ofthe concepts willfail to comprehend the essentialconcepts of
substitute product threats.However, this would likely be the case for whichever force
was fifth in the order.Users of the templates should feel free to experiment with the
own order to see what works best for them.
Standard format of alltemplates
All of the five forces templates share the same underlying format. The particula
be analyzed is listed at the top with an asterisk that directs the user to an expla
how this force may threaten the profits of firms in the industry.Below the title are the
individual components of the templates as follows and as depicted in Appendix
Sources of threats.Six to eight contributing sources of threats from the underlyin
structure of an industry are listed for each force. These are taken from Porter’s
publications. For most of the threat sources there is consistency between what
template and what can generally be found in other explanations of the five forcein
textbooks). However, with substitute products in particular, greater detail is pro
templates than what is typically found in other sources. Much of this is derived f
(1985) Competitive Advantage and is not ordinarily used in descriptions of the fi
However,Porter devotes significant space to substitute product threats in this wor
provides much greater detail as to how this particular threat can be assessed.
Threatlevelindicator bar.Each of these six to eight sources of threats is to be
analyzed and theuser may then indicatethe relativethreatlevelby marking
(e.g. circling) the threat level indicator bar above the name of the item. The fart
the mark,the higher the analyst perceives the threat level to be (as indicated by
shaded bar just below the title).To aid the analyst,bar labels are provided for each
threat source that indicate the value,level,or measurement that is associated with
either high or low threat levels.Below the name of each threat source,there is space
enough for the analyst to write brief explanations, thoughts, notes, analysis, etc
detailed comments may be noted on the back of the template.
Driving factors.To the left of each potentialthreat source,there is a square box
labeled “DF”.The analyst is to mark the box(es) of those contributing threat sourc
s/he determines to be a driving factor of the threat levelof a particular force.The
number of driving factors may vary by force and industry.Other formats have been
considered and/or used to indicate the relative weight of a contributing factor. O
extreme,there is an implied equalweighting to each source of threat if no special
designation is provided (Coulter,2013).On the other extreme,mathematicalweights
could be used to assess each threat source (Lee et al., 2012). The format descri
attempts to strike a balance between the two extremes and maintain depth of a
without bogging down the analyst in three or four dozen mathematical assessm
and their subsequent use in equations and calculations.
Threats and opportunities.Finally,in an attempt to more directly link analysis to
strategic action,space is provided for the template user to indicate key opportuniti
and threats facing the focus organization.Without an explicit,clearly stated tie-in to
opportunities and threats,the full value of an industry analysis utilizing the five forces
framework is notrealized.Often,the five forces are presented as a purely external
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analyticalexercise and are not linked to specific resources of the firm.This lays the
groundwork foran unnecessary and unfortunatebattlefor paradigm dominance
between Porter’s five forces and the resource-based view ofthe firm (Prahalad and
Hamel, 1990; Barney, 2011). Contrary to common perceptions, the five forces framework
does,indeed,takeinto consideration theuniqueresourcesof the firm, but that
consideration is made after the industry analysis is complete. The five forces framework
and the resource-based view of the firm can be considered complementary perspectives
(Porter,2008)ratherthan adversarialas is commonly thecase(Makhija,2003;
Ronda-Pupo and Guerras-Martin,2012).Specifically linking five forces assessments to
opportunities and threats can help strategic thinkers develop powerfulresponses to
industry pressures to improve competitiveness and increase profits.
Example template: competitive rivalry in North American spectator sports
Seeing an example of a completed template concretely illustrates the mechanics of the
templates and provides additionalclarity for users.Included as Appendix 2 is an
example template assessing competitive rivalry in North American spectator sports.
This industry includes the four “major” sports of baseball,football,basketball,and
hockey at both the major and minor league levels (professionally)and collegiately;
other team sports such as soccer; individual-based sports such as track and field, golf,
tennis, and even auto racing.Only the competitive rivalry template is provided due to
space limitations, but the form and structure is the same for all five of the forces. The
text in italics font is meant to represent the hand-written analysis of a template user.
Below each of the eight sources of competitive rivalry,there are brief comments
explaining the thinking behind the assessment and the placement of the shaded circles
on the associated threat levelindicator bars.Some of the comments include source
citations and quantitative measures. The level of documentation and rigor used in the
analysis is variable. In this particular example, four of the threat sources are identified
with check marks in the corresponding boxes as the driving factors of competitive
rivalry in the industry.Finally, key threats and opportunities are identified in the last
two boxes near the bottom of the page.These could be used in different ways by the
template user, including but not limited to incorporation into a larger SWOT analysis.
Possible modifications and extensions
These templates have evolved over time and significant alterations have been made to
address observed confusion on the part of users and to strengthen their practical use.
Future modifications are likely as new feedback is received and a wider audience utilizes
them. A different system of indicating which sources of threats are more important could
be developed. Originally, and following the example of most other attempts at practical
application ofthe framework,the templates did notdirectthe userto distinguish
between themostimportantand leastimportantthreatsources.A mathematical
weighting system similar to a TOWS (Weihrich,1982) or MOWST matrix (Dobbs and
Pisarczyk, 2012) was considered, but ultimately rejected due to anticipated unwieldiness.
One other modification has been seriously considered.While there is no room on the
template to include detailed explanations of how each of the threat sources relates to one
of the five forces (e.g.why/how slow or negative industry growth causes higher levels
of competitive rivalry), these descriptions could be included on the back of the template.
The advantage of this would be added convenience for the user,but there could be a
Porter’s five
forces
framework
37

negative impact on student learning if there is too much concern for convenienc
not enough individual processing of concepts.
Porter’s five forces framework is a powerful tool in the hands of a skilled man
or analyst. Unfortunately,no practical,systematictemplatesthat balance
comprehensiveness and ease of use have been developed to help in the applica
of the framework to actualorganizations.The templates presented here have been
developed with this need in mind.Thus, far, usage in classroom and consulting
settings has yielded positive feedback and reports of higher levels of comprehe
and better strategic insight demonstrating the value of this tool as a means of a
Porter’s five forces framework of industry analysis.
References
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Michael Porter”,Strategy & Leadership,Vol.40 No.2,pp.5-10.
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Prentice-Hall,Upper Saddle River,NJ.
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pp.92-101.
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Saddle River,NJ.
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Vol.86 No.1,pp.78-93,Editor’s note,edited by M.E.Porter.
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Upper Saddle River,NJ.
Dess,G.G.,Lumpkin,G.T.,Eisner,A.B.and McNamara,G.(2012),Strategic Management: Text
and Cases,6th ed.,McGraw-Hill Irwin,New York,NY.
Dobbs,M.E. and Pisarczyk,T. (2012),“The MOWST matrix for nonprofit strategic decision
making”,Journalof Business, Society and Government,Vol.4 No.1,pp.29-45.
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Teaching & Learning,Vol.1 No.9,pp.69-84.
Hill, C.W.L.and Jones,G.R.(2013),Strategic Management:An Integrated Approach,10th ed.,
South-Western Cengage Learning,Mason,OH.
Hitt,M.A.,Ireland,D.A. and Hoskisson,R.E. (2013),Strategic Management:Competitiveness
& Globalization: Concepts and Cases, 10th ed., South-Western Cengage Learning, M
Jonas-Dwyer,D. and Pospisil,R. (2004),“The millennialeffect:implications foracademic
development”,Proceedings of the 2004 AnnualInternationalConference of the Higher
Education Research and Development Society of Australasia (HERDSA), July, pp. 35
Lee, H., Kim, M. and Park, Y. (2012), “An analytic network process approach to operation
of five forces model”,Applied MathematicalModeling,Vol.36 No.4,pp.1783-1795.
Magretta,J. (2012),Understanding MichaelPorter:The EssentialGuide to Competition and
Strategy,Harvard Business Review Press,Boston,MA.
Makhija, M. (2003), “Comparing the resource-based and market-based views of the firm
evidence from Czech privatization”, Strategic Management Journal, Vol. 24 No. 5, p
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Marcus,A.A. (2011),ManagementStrategy:Achieving Sustained CompetitiveAdvantage,
2nd ed.,McGraw-Hill Irwin,New York,NY.
Moore,A. (2007),“They’ve never taken a swim and thoughtaboutjaws:understanding the
millennial generation”,College and University Journal,Vol.82 No.4,pp.41-48.
Napshin, S. (2010), “Strategy text: revised results”, November 2010 archives of BPS-NET, available at:
http://aomlists.pace.edu/archives/BPS-NET.html (accessed November 3, 2012).
Pearce, J.A. and Robinson, R.B. (2013), Strategic Management: Planning for Domestic and Global
Competition,13th ed.,McGraw-Hill Irwin,New York,NY.
Porter,M.E.(1980),Competitive Strategy: Techniques for Analyzing Industries and Competitors,
The Free Press,New York,NY.
Porter,M.E. (1985),Competitive Advantage:Creating and Sustaining Superior Performance,
The Free Press,New York,NY.
Porter, M.E. (2008), “The five competitive forces that shape strategy”, Harvard Business Review,
Vol.86 No.1,pp.78-93.
Prahalad, C.K. and Hamel, G. (1990), “The core competence of the corporation”, Harvard Business
Review,Vol.68 No.3,pp.79-91.
Ronda-Pupo, G.A. and Guerras-Martin, L.A. (2012), “Dynamics of the evolution of the strategy concept
1962-2008: a co-word analysis”, Strategic Management Journal, Vol. 33 No. 2, pp. 162-188.
Rothaermel,F.T. (2013),StrategicManagement:Conceptsand Cases,McGraw-HillIrwin,
New York,NY.
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Strategy:The Questfor CompetitiveAdvantage:Conceptsand Cases,18th ed.,
McGraw-Hill Irwin,New York,NY.
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Further reading
Ozanian, M. (2012), “The business of baseball 2012”, available at: www.forbes.com/sites/mikeoza
nian/2012/03/21/the-business-of-baseball-2012 (accessed November 3,2012).
Plunkett Research (2012),“Sports industry overview”,available at:www.plunkettresearch.com/
sports-recreation-leisure-market-research/industry-statistics (accessed November 3, 2012).
About the author
Dr MichaelE. Dobbs is an AssistantProfessor ofmanagementin the Lumpkin College of
Business and Applied Sciences,Eastern Illinois University.He received his PhD from the
University of Texas at Dallas and MBA from Baylor University.His research interests include
appliedstrategicmanagementof non-profitorganizations,small businesses,and sport
organizations.Michael E.Dobbs can be contacted at:[e-mail]
(The Appendices follow overleaf.)
Porter’s five
forces
framework
39
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Appendix 1
Notes: *Rivalry necessitates price cuts, new product development, advertising campaign
service improvements depending on the intensity and basis of competition between riva
organizations;†DF – driving factors ofindustry dynamics to be indicated with check
marks
Threat of Competitive Rivalry*
Low THREAT LEVELS High
DF†
Few/Leader Existing Competitors Numerous/Balanced
High Industry Growth Slow/Negative
Low Fixed and/or Storage Costs High
High Product Differentiation Low
High Switching Costs Low
Low Strategic Stakes High
Small Increments Capacity Expansion Large Increments
Low Exit Barriers High
THREATS
1.
2.
OPPORTUNITIES
1.
2.
(continued)
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Notes: *Powerfulbuyers (the firstfive)and/or price sensitive buyers (the lastthree)
force down prices,demand better quality/service,and play competitors off one another;
†DF – driving factors of industry dynamics to be indicated with check marks
Threat of Buyers/Buying Groups*( )
Low THREAT LEVELS High
Single/Few Buyer Orders Large Volumes
Low Buyer Information High
Not Feasible Buyer Backward Integration Credible Threat
Highly Differentiated Industry Products Standardized
High Buyer Switching Costs Low
Low % Overall Buyer Costs High %
High Profits Buyer Profitability Operating Losses
High Impact Buyer Product/Service Low Impact
THREATS
1.
2.
OPPORTUNITIES
1.
2.
(continued)
DF†
Porter’s five
forces
framework
41

Notes: *Powerfulsuppliers charge higher prices,limit product/service feathers/quality,
and/or shift costs to other industry players; †DF – driving factors of industry dynamics to
be indicated with check marks
Threat of Suppliers/Supplier Groups* ( )
Low THREAT LEVELS High
Many Organizations Supplier Concentration Few Organization
High % Supplier Volume/Profit Low %
Not Feasible Supplier Forward Integration Credible Threat
Standardized Supplier Products Highly Differentiated
Low Industry Switching Costs High
Many Viable Options Supplier Substitutes No Viable Options
THREATS
1.
2.
OPPORTUNITIES
1.
2.
(continued)
DF†
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Notes: *The threatof new entry putsdownward pressureon prices,and upward
pressure on costs/rate of investment necessary to keep new entrants out of the industry;
†DF – driving factors of industry dynamics to be indicated with check marks
Threat of New Entrants*
Low THREAT LEVELS High
High Supply-Side Economies of Scale Low
High Network Effects Demand-Side Benefits of Scale Low Network Effects
High Switching Costs Low
High Capital Requirements Low
First Mover Benefits Incumbency Late Mover Benefits
Limited Access Distribution Channels Easy Access
Regulations Government Policy Subsidies
Retaliatory Anticipated Incumbent Response Welcoming
THREATS
1.
2.
OPPORTUNITIES
1.
2.
(continued)
DF†
Porter’s five
forces
framework
43

Notes: *Substitutes perform the same/similar function as products of the industry but by
different means.Viable substitutes place a ceiling on prices and drive up costs related to
product performance,marketing,service,and R&D;†DF – driving factors of industry
dynamics to be indicated with check marks
Threat of Substitutes*( )
Low THREAT LEVELS High
More Expensive Price/Indirect Costs Less Expensive
Low Buyer Price Sensitivity High
Lower Performance Higher
High Buyer Switching Costs Low
Risk Avoidance Buyer Profile Risk Seeking
Substitute Industry Price/Performance Trends↓ Cost,↑Performance↓ Cost, ↑Performance
THREATS
1.
2.
OPPORTUNITIES
1.
2.
(continued)
DF†
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Appendix 2
Notes: *Rivalry necessitates price cuts, new product development, advertising campaigns,
service improvements depending on the intensity and basis of competition between rival
organizations;†DF – driving factors ofindustry dynamics to be indicated with check
marks
Threat of Competitive Rivalry*-- Spectator Sports (North America)
Low THREAT LEVELS High
Few/Leader Existing Competitors Numerous/Balanced
High Industry Growth Slow/Negative
Low Fixed and/or Storage Costs High
High Product Differentiation Low
High Switching Costs Low
Low Strategic Stakes High
Small Increments Capacity Expansion Large Increments
Low Exit Barriers High
THREATS
1.
2.
OPPORTUNITIES
1.
2.
DF†
Porter’s five
forces
framework
45

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