Frameworks
Porter's Five Forces
Five pressures on how profitable an industry is; vocabulary, not a case structure.
Facts checked against sources onWhat does Porter's Five Forces mean?
Porter's Five Forces (first published in 1979) describe what drives the long-run profitability of an industry: rivalry among existing competitors, the bargaining power of buyers, the bargaining power of suppliers, the threat of new entrants, and the threat of substitutes. In a case interview, do not walk through all five. Write the return the client needs, then name the one or two pressures that move its price or volume, with numbers.
Where does it come up in case interview prep?
- Getting industry-aware fast: the 10-minute industry scanLesson in How industries work: the toolkit
- What competitive advantage really isLesson in Why some businesses win: competitive advantage and the economics of strategy
- Market study and industry analysisLesson
- Porter's Five ForcesWhy reciting it fails, and what to do instead
Related terms
- Barriers to entryWhat makes it hard for new competitors to enter a market.
- Competitive advantageWhat lets a firm earn more than its rivals over time.
- FrameworkA ready-made list of buckets for a common kind of case; know the words, do not recite them.
- Porter's generic strategiesCompete on lowest cost, on being different, or by focusing on a niche.
- BCG growth-share matrixSorting businesses by market growth and relative market share.
- Ansoff matrixFour growth routes: existing or new products in existing or new markets.
- McKinsey 7S frameworkSeven parts of an organization that must fit together.
- SWOT analysisStrengths, weaknesses, opportunities and threats.
Learn it in context
See Porter's Five Forces at work in a lesson from How industries work: the toolkit, with checks as you go.
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