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Analysis Without Paralysis: 12 Tools to Make Better Strategic Decisions, Second Edition by Craig S. Fleisher, Babette E. Bensoussan

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7. Five Forces Industry Analysis

Description and Purpose

The Five Forces Industry Analysis, developed and popularized by Michael Porter, is designed to help you understand an industry and its participants. Since the intensity of competition and profitability among companies can vary widely across industries, identifying an industry’s profit potential or “attractiveness” provides the foundation for bridging the gap between your firm’s external environment and internal resources.

The Five Forces Industry Analysis is one of the most highly utilized analytical tools for assessing the competitive environment. The framework Porter developed is based on an economic model known as the “structure-conduct-performance” or S-C-P model. It states that an ...

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