The Five Competitive Forces That Shape Strategy

An Interview with Michael E. Porter, Professor, Harvard University. Porter's five competitive forces is the basis for much of modern business strategy. Understand the framework and how to put it into practice.

[@user-oc7uu8ss1x]

Who is also here because of uni?

[@studyfayz566]

Al Belfort pray for me as my end semester exam is due tomorrow

[@PeterKallio]

@@studyfayz566 Same here :)

[@MrLOLSager]

My professor explained this so poorly, let’s hope I’ll understand it now

[@Exx777]

im here bcs of corona

[@monicarachel6825]

me

[@mariselidiazmarin2160]

(F1) Bargaining power of customers. (F2) bargaining power of suppliers. (F3) Threat of new entrants. (F4) Threat of substitutes. (F5) Rivalry among competitors

[@perseverancemaraire3651]

+Mariseli DIAZ MARIN thank you was about to rewind.

[@hulumonkey48]

you are so clutch bless your soul

[@umraansyed]

you fine ass woman. thank you

[@keinansoko5797]

God is a woman.

[@vsheph01]

This is just a spin-off of SWOT.

[@EsraBaykal]

He designed the whole strategy framework which all the world business' are using and he just finishes his speech with " we keep learning" Damn it!

[@anypis123]

kesinlikle..! :)

[@varunaja]

Yes, the most beautiful part............

[@DanielRodrigues-bx6lr]

It's the story of humanity!

[@petercole2592]

Professor Porter pioneered the management strategy framework Esra. Formal essay writing @esra baykal haha

[@nickferara8945]

I read three of his books. makes you want to put a bullet in your brain from boredom but they teach a lot.

[@ojwanggeoffrey2770]

Thought I was alone

[@UnfortunateLee]

Why are you putting me off

[@ramisantonio1792]

Facts

[@KBr-ud6ly]

Welcome to the world of Accounting, Tax & Finance 😅

[@chrismatthew8929]

Love his books, was literally my bible(s) studying MBA 🤘🏻🤩

[@johnnymeringues987]

I pour concrete for a living and even I found this extremely useful.

[@finakim1121]

I think pouring concert for a living is an admirable job.

[@V1N_574]

I strongly beilive that you are closer to how the economy is moving based on how bussy your job is. Very differently than 9 to 5 inside a cube. Combining your job experience and latest news you can have a very clear picture of whats to come and do the necesarry arrangements.

[@mizanakhtarkhan3846]

I was a 12 year old boy when Michael was interviewed in this video...and now I am in a B school trying to better understand business through this video. Thanks Michael for your timeless sharing of knowledge.

[@darkevola7975]

Sameeeeee👌👌👌

[@nicholaschikoye2402]

I was actually three

[@nithishlosrawar9342]

I was 7 years

[@AndrewTheTransformer]

By now, you may have graduated? 😊

[@mizanakhtarkhan3846]

@@AndrewTheTransformer yes indeed!!

[@mrphoto776]

I love that I don't have to pay harvard prices to get such great instruction.

[@ryanburnett1109]

One of the great minds in Business. Clear, concise and relevant to todays practices.

[@kaveerajsahadew9282]

The world will always recognize you and your contributions in this field. You merit the title of Professor.

[@fredoginga456]

So the guy's still alive... damn you genius. The five forces are really useful

[@TheEstermann]

Thats what I thought too XD

[@jonyjony12345]

Useful ... For exam

[@KommentarSpaltenKrieger]

Man, knowing to articulate in such a graphic and yet precise manner is a hell of a trait. Makes it really interesting to listen to this.

[@shanesweeting1505]

The article being mentioned here is actually the 3 assigned reading in my Strategy course for the Executive MBA program - 10 years after it was published. I think Porter knows his stuff!

[@LocaleerBiz]

This points out that it is important to look at the impact these forces have on margins, which often gets lower scrutiny than direct competitors who impact sales. A business needs to think about all of these forces because they all make an important contribution to profits or, if managed poorly, losses.

[@CarloJose0808]

I have his two books - Competitive Strategies and Competitive Advantage... very useful in my life in business. Unfortunately, my senior managers and company owners don't read these types of books, so there goes the business that they manage.

[@AJ-nn1kr]

Carlo Jose , I can understand!

[@TheRiswinAshraf]

Story of a lot of people's lives. So quit and start your own company Carlo! You can do it!

[@eugeniocampos1732]

i just read competitive advantage, should i read competitive strategies? What are the differences, competitive advantages has like an intro from the previous book

[@rishisachar6181]

You should try to gift them an audio book subscription of these two classics in this time & era, incase you are all still colleagues :)

[@jackjack4412]

Easier said than done.

[@franciskintu6524]

Michael Porter is a great gift to the business community.

[@davidwilson1961]

Porter 5 forces tool is the most use tool for industry analysis. Great to have a genuis like Porter in academic.

[@sirikondavinay9921]

David Wilson really

[@studyfayz566]

*useful tool and academics. Hope u don’t mind me correcting your mistakes

[@hautran1030]

How about PEST tool? I think it's useful too. PEST and Poster's five forces model are great for external analysis while product life cycle and BCG matrix are suitable tools for internal analysis.

[@numbstuffpeoplesay9309]

@@hautran1030 PESTLE is for macro environment/indirect contact. P's 5 forces is for micro environment/direct contact.

[@bcbitchkkv]

@@hautran1030 Check Michael Peng's "The Institutional-Based View as a third leg for a Strategy Tripod" where he suggests looking at.. (1) The surrounding environment(in the form of "institutions": humanly devised constraints - can be political, ) in addition to-- (2) The competition within the Industry and .. (3) The firms own resources & capabilities.. -to form a 'tripod' framework for business strategy. Simply put, BCG & VRIO for internal resources & capabilities (3), 5 Forces for industry competition (2), PEST(EL) for the environmental analysis. I see it as going from 2D to 3D bringing in depth in addition to height and width :)

[@samraj8219]

What a profound session on real business world scenarios, times are changing but fundamentals are the key to progression 5 Forces are those factors.

[@bjbrunetti]

"purpose of strategy is alignment" - love it!

[@wasimakhtar6082]

Mr. Porter, after enlightening us advise us that we keep learning. Thank you, Professor.

[@TonyMarino]

Dr. Porter is my absolute professional mentor. Thank you!

[@marij5589]

Gosh, these 2 are so likable and knowledgeable. I love the grounded reality and practicality of the discussion. No fluff or pipe dreams.

[@cameronwayman8231]

What an incredibly talented and knowledgeable man!

[@r3bony]

Thanks a lot. Really helps me in my dissertation. Such a great man Prof. Porter.

[@strategicbusinessitservice2819]

Brilliant video that clarifies application of the five forces in actual business environment.

[@gregoryfoltyn8437]

I could listen to him my whole life

[@Paresh_Bhimani]

The man is an intelligent genius alive today !

[@JM-mt8kp]

A great video which explains the basics of this model quite comprehensively. Although this framework is really robust in many cases, it does fail when a disruptive innovation comes into play. When applying this model a consultant or marketing manager should not only take the current substitutions of the market but should also be aware of disruptive innovations coming from new markets. This mistake has led to many MNE's repelling a certain business area because of their unawareness of developments in other industries.

[@kevinbaker07]

great insight

[@ChathuraSemaratne4x4]

This is absolutely an eye-opener and helped me to streamline my options and evaluate my high-level decisions to guide the company on a profitable path. On the other hand, this was a very good tool to maintain in an organization to navigate the company in the right direction with the external environment challenging the business in a high magnitude, While the PESTEL analysis is highlighting the Macro environment. Thank you, MR. Porter. I'm currently I'm an MBA student at London Metropolitan University and working as a General Manager for a leading FMCG & Manufacturing organization in Sri Lanka. Thank you once again Sir.

[@greshanpeter9691]

This is awesome interview and amazed to learned how robust and practical this model over three decades.

[@arazimsheu1841]

Awesome session with Prof. Micheal E. Porter. Porter's five Forces Model is a generalized model that can be applied to every sector in a micro and macro environment

[@bhusals]

Five forces which definitely is acceptable and going to be accepted for longer. This includes basically for the start ups which literally need to understand those forces which makes the business strategy better and competitive and delivers higher value proposition.

[@shanexy]

this is great i love this and i enjoyed this during my MBA thats when my heart was changed totaly and fell inlove with strategy which made me take the strategy subject futher into my PhD

[@jamesmichaelwalker683]

Love the concept of 5 competitive forces. And I love also the empirical evidence (air industry).

[@blufosil11]

The way Mr. Porter described how business rivals could thrive in the industry together made me think of the different species of finches on the Galapagos Islands. Each of the finches has their own different niche that they fulfill on the island, they exist in the same area, but they can thrive on different types of food. Business rivals can do this as well, they exist in the same space as their competitors, but they each offer something unique to the customer allowing them to thrive.

[@rickrolls1287]

kzbin.info/www/bejne/bIWTaJqtlp2YmJo ,,

[@DuskAndHerEmbrace13]

Absolute badman on the business school scene. Mad respect to this brute.

[@XxKINGatLIFExX]

I've written about this guy in so many assignments at Uni, had no idea he would talk like that. What a ledge!

[@nicolespiffi]

Management class!!!

[@MIMLC]

Love this video and the complexities of how competitive forces shape strategy...great job

[@gilceavarazvan8746]

This interview is still given as example at top bussiness programs. I am amazed

[@rza139]

Amazing video! Thanks professor.

[@haddagart]

He is the genius who reshaped my concepts about competition analysis.

[@petekdemircioglu]

Learned this model in 2009. Using it since than. Its great.

[@beckyserrano3067]

Practical, Simple, LOGICAL. I got a giggle of his phrase...."" that Airline industries are among the least of profitable industries known to man..." and then adds... "..it's always puzzled me." AND uses them as an example for his forces; brave and brilliant! I like that he acknowledges that there is STILL constant monitoring to take place even after applying the 5 forces. Always be ready to learn more.

[@AlignacademyTV]

Also found his comment about the "least profitable industry known to man" extremely funny...

[@chelseafc81]

Thank you for sharing, it helped me with my coursework

[@johnudure4782]

Whoever is Dr. Allen Oyama strategist should listen to this video. I'm here because I was reading IT management courses, the use of IT as a means of competitive advantage in business. Basically, strategic analysis using the SWOT techniques.

[@AkashGaikwadshirala]

A nice video of Michael Porter's Five Competitive Forces, it is beneficial to increasing the knowledge about strategy.

[@bengygirl]

this video reali helped with completing my strategy assignment. first time i've seen porter too.

[@fortunemutete5734]

Excellent video that clarifies application of the five forces in real business environment.

[@mehedijahan5078]

Wish to complete a course under his teaching such easy going love and honor from deep of my heart

[@jusherechillin]

I like how this video was made, and presented.

[@magdalinkanavalli7964]

Short Summary for The Five Competitive Forces That Shape Strategy Michael Porter discusses the five competitive forces that shape strategy in industries, using airlines as an example of intense price competition. - The Five Competitive Forces That Shape Strategy - Understanding the five forces can help analyze industry profitability. - Airlines industry has unfavorable economic drivers - Porter's Five Forces framework is applicable to any industry and helps focus on underlying fundamentals. - Positive-sum competition is where companies compete on different attributes, services, features, and customer support relevant to particular groups of customers. - Industry analysis is the starting point for strategy formulation. - Understanding industry needs to be broadly understood in the organization - Strategy documents should not be kept secret from employees, suppliers, and competitors.

[@OneGamblor]

Michael Porter is a living legend in business, if only I could be as intelligent as you are.

[@jieziqueen]

Potter professor is known for his contribution in business strategy, finally see him here, i really agree with his idea that companies should not battle mindlessly which will lead to zero-sum game, the clever way is to widen the market share of whole industry they are in.

[@saadsohail8023]

Good, we take many information to incorporate during our MBA programmed

[@nyanpraterjr1819]

Michael (Harvard Business School), thank you for talking with us about your greatest achievement, Porter's Five Forces, as it relates to each of our businesses plans. 8:50, "Figuring out what your industry is and drawing the right boundaries." Even when we all help build the first Lunar Boom Town on the moon, I'm sure much more than half of us will be using Michael Porter's Five Forces to friendly-compete with each other in a non-zero-sum sort of way. Great-unknown bless you and your loved ones, Michael.

[@zaldabus]

Great video, loved the overall snarkyness and some of the subtle aside commentary. In respect to the 5 competitive forces, I think we would be hard pressed to find anyone who would agree that these 5 factors are critical when it comes to assessing the potential success of a company. What I would like to know is, how can we go about quantifying these forces so that they can be strategically used to develop quantifiable steps towards approaching each force?

[@rizalukman7982]

I studied marketing theory and proactive in Australia.One of the most important concept is the porters five forces

[@effectdirect001]

Very apt. This applies perfectly to business till today.

[@dragonmoon26]

Excellent questions from the interviewer !

[@CFCBluBulb]

My favorite analytical tool. Wow!

[@kerrymoy5104]

Excellent discussion on this topic! Thanks!

[@TrueTurners]

Reviewing for one of our Masters in Information Assurance courses...great understanding!

[@kaylylyn]

Thanks for sharing this with us!

[@modepet]

Very insightful and a nice possibility to see and hear Prof. Porter:-)

[@oktofnainggolan22]

See this video is fun as i have inspired by his book and masterpiece.. Thanks Professor...

[@MegaAcappella]

Stupenda lezione di gestione aziendale e di business!!!

[@xyinox]

excellent analysis of the competitive forces !

[@nandvikar]

Marketing and strategy Guru ..Michael porter

[@mariusvanderleek471]

Classic old school thinking - thanks for the contribution to strategic thinking from an external perspective - use with Adizes Business Life Cycle explanation for another external perspective...

[@lolastaples400]

Competitive forces and strategies shape the very foundation of business principles. The model can be applied to every business environment that I have encountered. The principles are priceless. Students seem to enjoy learning these concepts.

[@marcleon1513]

Excellent questions by the interviewer. He gets right to the meat and potatoes.

[@ahmadpowerdream]

very inspirational and insightful interview so far around topics of strategy, the explanation is very well-articulated. It makes me wanna jump right into a start-up business and play the game! so delighted to see this!

[@lighthousekeeper205]

Thanks for this...big big help for my course work.

[@Zonsendimoyo]

The intensity of competitive rivalry..For most industries, this is the major determinant of the competitiveness of the industry. Sometimes rivals compete aggressively and sometimes rivals compete in non-price dimensions such as innovation, marketing, etc. number of competitors,- rate of industry growth,- intermittent industry overcapacity , exit barriers , diversity , informational complexity and asymmetry ,- fixed cost allocation per value added , level of advertising expense

[@ahmedal-aqta3952]

Chauncy Jere totally agree

[@LalitMoorjani]

This is a good Post, Very helpful to visualize new strategies and understand the drivers of profitibility and competition. Lalith Moorjani Piscataway

[@xinyizhou1711]

Ya, totally agree with you ! I have to do my assessments by using his strategies.......

[@jobyvincent6325]

An astonishing interview

[@mohsinameermukhtiarkazmi8014]

One of the excellent models to understand the external market ...!!

[@tahiaalam5291]

This was for my management class :D

[@HermosoEcuador]

Learning strategic management and innovation on my final year at uni and OMG. They make Porter's work of 5 forces, generic strategies and generic groups look almost irrelevant. Read: *Strategy Safari (Mintzberg) *Innovator's Dilema (Christensen) *Schumpter's Creative Destruction theory *Dynamics of Strategy (Duncan Robertson) - also happens to be my teacher 'The The dirty little secret of strategy industry is that it doesn't have any theories of strategy creation' - Hammel (1997)

[@karelltulod3079]

Thank you for your advice sir

[@germantempo]

What a magnificent video and great explanation

[@valizadintren]

the five forces, explained by porter himself???THIS is awesome....

[@TinaBrinkleyPottsrocks]

Great video. I wonder would he say the same thing about the internet today...it has been called the great equalizer for the little guy. I also like that he speaks on competition. I believe in this new economy, you should only be in competition with yourself. Yes, you must know what the industry is doing, but you need to individualize and decide what part you can claim for yourself and then keep upgrading from there.

[@aselleabigo7451]

Makes sense because most times we just jump into business with excitement and sentiments. Look before you leap.

[@stevenhavekes8629]

Who is here in 2024 learning for the selection test?

[@businessstrategiesinsights8737]

Great info-thanks for sharing!

[@TheZentopa]

In reference with Porter's five forces include - three forces from 'horizontal' competition as followings; 1.the threat of substitute products. 2.the threat of established rivals. 3.the threat of new entrants. - two forces from 'vertical' competition as followings; 4.the bargaining power of suppliers. 5.and the bargaining power of customers. For his remarks, 'horizontal' is prone to deal with external sources meanwhile the remainder are internal threats combined in terms of 'vertical'.

[@khtervola]

Competition ought to be according to true justice in order to benefit the participants the most. Pay for what is worth it, so your own side earns more, punish for what is harmful and your own side works with less problems. These are general principles that come into play in your own thinking: correct feedback = objectivity, in the working of your own group: rational arrangements, and in your own society: good standard of living & a strong nation with a wise culture - all these for your own good!

[@LorenzoMarkovian]

Can you please share a link to his article that he refers to in the interview. Thanks

[@thorthura]

I can believe that I m watching that... just because of my exam. Damn!!!

[@ariunaa87]

Thank you for your good information.

[@boscohaule1543]

The Five Competitive Forces are key to understand the competition around any business. An understanding of actions done by competitors is an opportunity for the organization to strategize better! The Porter's Model is the right tool to help business leaders to scan the business environment (both external and internal) and respond accordingly

[@DonneyLiu]

I have some new understandings for the five forces now!

[@jeannettefigueroa5768]

An important model to apply. Thanks for the interview.

[@TheCompaniesExpert]

Nice video on strategy

[@odeyinkamotunrayo4789]

Very good explanation

[@SHAHULHAMEEDMOHAMEDSALIB-wo8wi]

Porter is a genius

[@wajahat87]

Must say that..that's the best video i watched in last 3 years...many thx to Neil connan@rgu

[@midorelife]

great video-Porter parabens!!!!