Porter’s Five Forces Template for Free

✍ Porter 5 Forces Template: How It Works

Porter's 5 forces model is often required in business analysis. It's a handy framework, but many students struggle with using it. That's why our team has developed this online tool.

With our free editable Porter's Five Forces creator, you only need to take 3 steps to create a beautiful report:

  • Fill in the blank fields.
  • Choose the template to your liking.
  • Download the final result in a DOCX, PNG, JPEG, or PDF format.

As you can see, our tool makes performing Porter's 5 forces analysis much more manageable! So, why not give it a try?

💪 What Is Porter's 5 Forces Analysis?

In a nutshell, the purpose of Porter's 5 forces diagram is to determine how five competitive forces shape a company's industry and affect its operations. Based on that analysis, students and business analysts are expected to identify the sector's essential weaknesses and strengths.

Michael Porter invented the framework in 1979. The five forces he proposed to analyze are:

  1. Industry competition
  2. New entrants
  3. Supplier power
  4. Customer power
  5. The danger of substitute products' emergence in the sector

To learn more about the framework, check out the questions below:

When do you use Porter's 5 forces? The framework is suitable for those who need to analyze a company's competitive environment and assess its competitive potential in its respective industry.
Is Porter's 5 forces internal or external? This approach primarily focuses on the external factors affecting the company's operations and decisions.
Why is Porter's five forces important? An in-depth analysis of the company's competitive environment can inform strategic decisions that will affect its profitability and increase its competitive advantage.

📉 5 Competitive Forces Framework: Benefits and Drawbacks

Using Porter's five forces diagram for a company analysis comes with certain advantages and disadvantages. Here's what you should keep in mind.

✔ Advantages

  • It's a helpful tool for competitive environment assessment.
  • It shows the company's strengths and its potential threats.
  • It can help identify strong competitors and their market positions.
  • It highlights the strategic opportunities a business may explore.
  • It informs corporate risk assessment.
  • It helps formulate the corporate strategy and vision for future development.

❌ Disadvantages

  • The framework is limited in the scope of factors it considers.
  • It doesn't quantify the metrics.
  • It has limited value for large companies.
  • It may only serve as an initial stage of analysis.
  • It gives little credit to business risk factors.
  • Its value varies for different industries.

📝 Porter's Five Forces Analysis Example

Now, let's examine an example of Porter's five forces analysis you can get from our generator. Here is a study of Uber using the five factors:

Threat of Substitute
  • Car sharing
  • Self-driving cars
  • Public transportation improvements
  • Bike sharing
  • Work from home (COVID-19 and aftermath)
Power of Buyers
  • High bargaining power of customers (strong ride-hailing competition)
  • Low switching barriers
  • Great value proposition for customers: low transaction and search costs, short waiting time, and low overall cost
  • Readily available information
Power of Suppliers
  • Weak bargaining power of drivers, which is currently rising
  • Low costs of switching to other ride-hailing companies
  • Great value proposition (low idle time and higher earnings)
Threat of new entrants
  • Low barriers to entry (including a threat of entry from unexpected areas, e.g., the tech giants)
  • Strong brand equity
  • Pressures for Uber to grow its economy of scale
Existing competitors No strong international competitor; most competitors are geographically concentrated:
  • Ola (India)
  • Didi (China)
  • Lyft (USA)

Thanks for reading our article! You're welcome to use our Porter's 5 forces generator whenever you need it. Feel free to check out our other tools, too:

🔗 References

  1. The Five Forces: Harvard Business School
  2. How Competitive Forces Shape Strategy: Harvard Business Review
  3. Porter's Five Forces: Factors of Competition and Examples: Indeed
  4. Porter's Five Forces Analysis: Baruch College: CUNY