5 Porter forces: definition, concepts and examples of the porter analysis model of competitive forces

Toda empresa o negocio, siempre debe realizar estrategias de marketing para alcanzar el éxito de la misma. Dentro de estas estrategias, no debe faltar el análisis Porter o las 5 fuerzas de Porter. El modelo de 5 fuerzas de Porter, sirve para determinar y evaluar la rentabilidad de una marca o negocio a largo plazo. En este artículo, te daremos detalles de esta herramienta y de cómo aplicarla a tu empresa.

The definition of Porter forces or the 5 Porter strategies consists of a competitive analysis that is used to develop strategies in different industries in the business sector.

Another way to explain what Porter's forces are is that it consists of a competitive analysis model, which serves to know what are the opportunities that are present in the market and that will help in the growth of a company, as well as threats.

Porter analysis was created in 1979, with the aim of analyzing the profitability of a specific sector.Companies, use the 5 Porter forces, to determine the profitability of their brand and know what are the probabilities of long -term success.

The so -called 5 Porter strengths are:

Who is Michael Porter?

Michael e.Porter is considered the father of modern business strategy.He is an economist, mechanical engineer and aerospace engineer, known for his economic theories, such as the 5 Competitive Forces of Porter.Currently, he is also one of the economy professors at the Harvard Business School and is the director of the Institute for Strategy and Competitiveness of that same institution.

Worldwide is known for different economy issues, their works have received recognition from different governments and academic circles.In addition, he is the author of 18 books and more than 1two5 articles.His work has been so recognized, that he has become one of the most iconic thinkers in the world, when it comes to business and competitiveness management.

Competitive Strategy: Techniques for Analyzing Industries and Competitions, is the name of its first book and, since its publication in 1980, it remains a reference in the field.The book had 63 editions in two7 languages and ended up catapulting his career.

Companies that use the 5 Porter forces

At present, there are different companies, institutions and organizations that apply Porter's competitiveness model, in order to enhance their products and services.Among the known companies, are Coca-Cola, recognized for selling soda around the world.In the sports field is the Under Armor line and thus, many other large institutions.

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In the case of Coca-Cola apply the analysis of 5 Porter forces as follows:

Porter's 5 competitive forces must help any company to know what is the percentage of profitability they have in the market they are directed.Next, we will detail each of them, so that you understand them better.

1.Customer power

This strength of the Porter competitive forces model is based on the fact that if a market or service has few customers, consumers may organize well to decide what price are willing to pay.This represents a threat to the business, since the cost that consumers choose can be appropriate for the client, but will be below the tax by the company.

In addition, when there are multiple suppliers, consumers increase negotiation capacity.It is a force that places the company under pressure and can also affect customer sensitivity, given the change in costs.

Factores determinantes de esta fuerza

Estrategias que puede aplicar la empresa ante esta fuerza de Porter

two.Threat of new competitors

This force of the Porter forces model, refers, that if in the market, there are no easy obstacles to enter the competition to the same item, the business will not be successful.

Ideally, to continue growing within any market, another company can arrive and offer the same product to create competitiveness.Michael Porter defined six input barriers that can be applied to create a competitive advantage.

Barreras de entrada de Porter

All types of market have input barriers, which are the obstacles that a brand, business or product has to overcome to position itself in its area and be among the best positioned companies.

La economía de escalas

It is that companies have a high level of production, compared to small businesses, which means that, having high production volumes, costs are reduced and they help position the business in the market.

La diferenciación de productos

It is when a product is very well positioned in the market, offering something different and attractive.Therefore, competitors must create striking strategies, because if they will not have difficulty being at the same level of competition.

Las inversiones de capital

Another of the barriers is when new companies must invest a significant amount of financial resources, in order to compete with the competition.One way to overcome this barrier is to increase the capital of products, to obtain greater market positioning.

Desventaja de costos

It is a positive barrier to companies, because competition cannot imitate the prices of your product.If competitors have higher, they must reorganize their strategies to have the same level of competitive costs.

Acceso a los Canales de Distribución

When there is no established distribution channel, it represents a disadvantage for brands that are growing.When companies already have their defined suppliers it is difficult to compete against the costs and quality of others in the market.

Política gubernamental

Political barriers are the most difficult to overcome, because not having government support, due to previously delimited laws and restrictions, a brand may not manage to settle in the market.

Estrategias que se pueden aplicar ante esta fuerza

3.Supplier power

This force of the Porter forces model explains that the suppliers of the companies, being very well organized, will offer a more attractive proposal for the market.The products or services will be more relevant, they will offer better payments, price conditions and orders sizes will also be influenced.

Suppliers have a constant negotiation with companies, due to costs, this is where the provider with more options has the advantage, because it will have less to lose, financially.

Factores determinantes en esta fuerza

Estrategias que debe aplicar una empresa para no depender de solo un proveedor

4.Threat of substitute products

This strength of the Michael Porter model indicates that every company must always be attentive to market innovations and the products it offers.In most sectors, a product can be replaced by another with better update.When an innova market, another can suffer, such as messaging or fax companies, which are seen in the position of reinventing themselves due to new methods, such as emails and instant messaging.

Factores determinantes de esta fuerza

Estrategias para combatir esta fuerza de Porter

5.Competitive rivalry

This phase, according to the 5 forces of Michael Porter, is the result of the previous four.Competitive rivalry, is what defines the profitability of a business, in any business sector.Meanwhile, less competitors in a market, the greater the profitability of the same.

Barreras que identificó Porter en esta fuerza

Estrategias para que una marca supere a la competencia

Porter's five forces help to understand that a company's resources must be maximized to overcome competition, regardless of the company's turn.

Brands and businesses must have a marketing plan, very well elaborated and have applied the Porter administration to survive in the business world.When an efficient strategy develops, entrepreneurs will obtain the success they expect.

According to the Porter matrix, all companies that wish to venture into any business sector will face different obstacles, so there are five competitive forces.They complement themselves with marketing, to create efficient strategies.Some of the benefits offered by Porter's analysis or business concept according to Porte, we describe them below.

Know how to identify opportunities

On different opportunities, it is very difficult to advance with a business and understand the risks of undertaking, so it is important to identify opportunities.

The analysis of the 5 Porter forces allows you to identify them and will help you be attentive to find the best solutions to the problems that arise.It is also a benefit that will help you in adapting products or services.

To improve company strategies

You can improve marketing strategies and all strategies that are related to the company and its growth.Each result that gives you the competitive analysis of Porter, will be very benefit to your business, because you can analyze the market, optimize customer service, offer additional services, improve merchandising, among others.

Compare competitive advantages

The competitive advantages are all those aspects that highlight and highlight a brand among the competition.As the advantages can several according to the item, or market sector to which you go, it is important to be able to compare them, forever to be one step in front of the competition.

Know everything that surrounds the company to anticipate strategies

Create strategies to achieve success with a company is important.But it is also necessary to know everything that surrounds a business or brand, to design the most appropriate strategies for the company and be prepared for any problem or inconvenience.

Porter's 5 forces will help you have a clearer vision and will be useful when designing any action plan.

Constitute a SWOT analysis

Having clear strengths, opportunities, weaknesses and threats of the company or brand, the successful path will be easier.

SWOT analysis is a scheme that will help you identify internal and external factors that can generate an important impact on the viability of a project, product, or service.To start with the analysis, the first thing to consider is to have a trained and knowledge team in the area that is part of your organization.

Then, you can create a document or spreadsheet, with the format of Michael Porter and its 5 forces.This format consists of a board divided into five parts, representing each force.Then it only remains to analyze each force and identify the aspects in a positive or negative way as best prefer.

Applying Porter's analysis is very simple.One of the main aspects that you must take into account is to be sure of the mission, vision and values that govern the brand.Next, we will explain what you should do in each phase of the 5 Porter forces, to obtain a correct analysis.

1.Threat of new participants

It is an important phase of the analysis.In it you must investigate and be aware of the ease that other companies have to enter the market.It is a step that will help you determine how much competition you could have a future.

two.Threat of new substitute products

In this phase of the analysis, you must evaluate and study how simple it is to copy or replicate the product or service offered by your company.

3.Bargaining power of suppliers

Another important step within the 5 Porter forces, because this phase seeks to determine how much negotiation power the suppliers of your raw material have.It is important to define this step, because if the supplier or suppliers have high negotiation power, they will seek to offer their highest prices and would not be convenient for the company.

4.Bargaining power of customers

This step must have the same priority as the rest, it is important to determine that the consumer has so much power over the price of your products or services, because they can manipulate the price of the same.

5.Competitive rivalry

According to Porter, this is the last phase of the analysis and one of the most important.It must be defined very detail what the current competition of your company is in the market.It is necessary to place data such as, number of existing competitors and who are able to achieve in the short and long term.

Having each defined step, the strategy will be much easier to carry out and achieve the objectives correctly.

The example of five Porter forces that we will detail below, will be based on a hypothetical sportswear company, which will be named One Sport.The main mission of the brand is to produce high quality sportswear and with a comfortable versatile design for athletes.While the vision is to get high quality garments to consumers, at the lowest possible price.Being the main assets of the company, accessibility and versatility.

Applying this data to the 5 competitive forces of Michael Porter, it would be made as follows:

Porter analysis or 5 Porter forces is an important tool and of great interest in the management of strategies of any company or brand.This method helps you know what happens in the market to which you belong and if you make good use of it, it will increase the profitability of your business.