Five Forces Analysis 5F (Five Forces Model)

Five Forces Analysis (or Five Forces Model) is the work of Michael E Porter . It is a way of analyzing the industry and its risks. The model works with the five elements (Five Forces). The principle of this method is a forecasting of the development of the competitive situation in analyzed industry, based on the estimate of the potential behavior of the subjects and objects involved in a given market and forecasting of the risk of imminent business from their side:

• Rivalry among existing firms - their ability to affect the price and offered quantity of given product/service.
• Potential entrants - the possibility that they enter the market and affect the price and offered quantity of given product/service.
• Suppliers - their ability to affect the price and offered quantity of necessary inputs.
• Buyers - their ability to affect the price and demanded quantity of given product/service.
• Substitutes - price and offered quantity of products/services are at least partially able to replace given product/service.