What are Porter's 5 forces?

The Porter’s Five Forces model is a tool for analyzing a company's competitive environment and assessing industry attractiveness. It includes five key factors that influence competition and profitability:

1. Threat of new entrants — how easily new companies can enter the industry and compete.
2. Bargaining power of suppliers — the ability of suppliers to influence prices and supply terms.
3. Bargaining power of buyers — the influence of customers on lowering prices and increasing quality.
4. Threat of substitute products — the presence of alternative products that can replace current ones.
5. Rivalry among existing competitors — the level of competition among companies in the industry.

Analyzing these forces helps understand what factors impact the business and where competitive positions can be improved.