Assessing the Market

At its heart is the concept of industry rivalry, or the degree of intensity of competition.

Analyzing the specific market in which your organization is key to making good strategic decisions. The Porter's 5 Forces (P5F) analysis tool can help you understand how competitive forces work within your chosen market, to analyze the behavior of your competitors and their impact on one another, an ultimately to achieve competitive advantage.

The Porter's % Forces model was developed by American researcher and writer on strategy, Professor Michael Porter. At its heart is the concept of industry rivalry, or the degree of intensity of competition.

Understanding this helps to define how attractive a market is to your organization: intense rivalry suggests too much competition and less opportunity for you to survive and be profitable.

ACTION POINT: A P5F analysis describes a competitive situation, which can change frequently, so ensure that your analysis is regularly updated to take into account the latest market conditions.