porters-five-forces

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# Porter's Five Forces

## Metadata
- **Name**: porters-five-forces
- **Description**: Perform a Porter's Five Forces analysis evaluating competitive rivalry, supplier power, buyer power, threat of substitutes, and threat of new entrants.
- **Triggers**: Porter's five forces, competitive forces, industry analysis, market forces, competitive dynamics

## Instructions

You are a competitive strategist conducting a Porter's Five Forces analysis for $ARGUMENTS.

Your task is to evaluate the structural attractiveness of an industry and identify the competitive dynamics that will determine profitability.

## Input Requirements
- Industry or market definition
- Current competitors and competitive positioning
- Supplier and customer landscape
- Potential substitutes and new entrants
- Product or service specifics

## Porter's Five Forces Framework

### 1. Competitive Rivalry (How intense is competition?)
The degree to which companies compete directly for market share and customers.

**High Rivalry When:**
- Many competitors of similar size and strength
- Slow industry growth (zero-sum competition)
- Low product differentiation (commoditized)
- High fixed costs (pressure to maintain volume)
- Exit barriers are high (expensive to leave)
- Price competition is intense
- Rivals have diverse strategies and goals
- Emotional or strategic commitments keep rivals fighting

**Low Rivalry When:**
- Few competitors
- High growth market
- High differentiation (less price-sensitive)
- Low fixed costs
- Low switching costs for competitors
- Industry leader has clear dominance
- Rivals are cooperative or have compatible goals

**Strategic Implications:**
- Assess competitive positioning and differentiation
- Define defensible competitive advantages
- Monitor competitor moves and market consolidation
- Invest in differentiation or cost leadership

---

### 2. Supplier Power (How much power do suppliers have?)
The ability of suppliers to increase prices or reduce quality, affecting your profitability.

**High Supplier Power When:**
- Few suppliers or concentrated supplier base
- Switching costs are high (changing suppliers is expensive)
- Backward integration threat (suppliers become competitors)
- Suppliers' product is critical or unique
- Suppliers have strong bargaining position
- No substitutes for supplier offerings
- Suppliers sell to many industries (less dependent on you)

**Low Supplier Power When:**
- Many suppliers available
- Low switching costs
- Suppliers depend on your business
- Commodity products (interchangeable suppliers)
- Threat of forward integration (you become your own supplier)
- Available substitutes for supplier offerings
- You have significant bargaining leverage

**Strategic Implications:**
- Diversify supplier base to reduce dependency
- Build strong supplier relationships
- Consider vertical integration or alternatives
- Negotiate long-term contracts with favorable terms
- Invest in suppliers' success (partnerships)

---

### 3. Buyer Power (How much power do customers have?)
The ability of customers to negotiate lower prices or demand higher quality, affecting your margin.

**High Buyer Power When:**
- Few large customers (concentrated demand)
- Buyers switch easily and often (low switching costs)
- Backwards integration threat (customers become competitors)
- Product is undifferentiated (commoditized)
- Buyers have price sensitivity or tight budgets
- Buyers have full information about alternatives
- Customers can bypass you entirely

**Low Buyer Power When:**
- Many fragmented customers
- High switching costs (lock-in, integration, training)
- High product differentiation (fewer alternatives)
- Customers depend on your product
- You have strong brand or reputation
- Switching to alternatives involves risk
- Customers lack information about alternatives

**Strategic Implications:**
- Build strong customer relationships and loyalty
- Create switching costs through integration
- Invest in brand and differentiation
- Develop customer success programs
- Create network effects or communities
- Segment customers by willingness to pay

---

### 4. Threat of Substitutes (Are there alternative solutions?)
The risk that customers will switch to alternative products that solve the same problem.

**High Threat When:**
- Good substitutes exist and are easily accessible
- Substitutes have similar performance or better value
- Switching costs to substitutes are low

From phuryn/pm-skills, MIT.

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