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65288a64fe Few new firms can enter and non-performing firms can exit easily. D., Hoskisson, R., & Hitt, M. Contents 1 Five forces 1.1 Threat of new entrants 1.2 Threat of substitutes 1.3 Bargaining power of buyers 1.4 Bargaining power of suppliers 1.5 Industry rivalry 2 Usage 3 Criticisms 4 See also 5 References 6 Further reading . However, for most consultants, the framework is only a starting point or "checklist." They might use value chain or another type of analysis in conjunction. Like all general frameworks, an analysis that uses it to the exclusion of specifics about a particular situation is considered naive. (1984), A resource-based view of the firm, Strategic Management Journal, Vol. It has been applied to a diverse range of problems, from helping businesses become more profitable to helping governments stabilize industries. Other Porter strategic frameworks include the value chain and the generic strategies. Suppliers of raw materials, components, labor, and services (such as expertise) to the firm can be a source of power over the firm when there are few substitutes. The most attractive segment is one in which entry barriers are high and exit barriers are low.
The following factors can have an effect on how much of a threat new entrants may pose:. (1997), Marketing Management, Prentice-Hall, Inc. (2008). Porter makes clear that for diversified companies, the first fundamental issue in corporate strategy is the selection of industries (lines of business) in which the company should compete; and each line of business should develop its own, industry-specific, five forces analysis. 171-180 PDF . It is based on Porter's model and includes Government (national and regional) as well as Pressure Groups as the notional 6th force. Prahalad Jim Collins Liddell Hart Carl Von Clausewitz Sun Tzu Adrian Slywotzky Chris Zook Concepts Business model Competitive advantage Experience curve Value chain Portfolio theory Core competency Generic strategies Uberisation Frameworks and tools SWOT Five Forces Balanced scorecard Strategy map PEST analysis Growthshare matrix v t e . "The Five Competitive Forces that Shape Strategy", Harvard Business Review, January 2008, p.86-104. References.