In a new HBR article The Five Competitive Forces That Shape Strategy, Porter, a Harvard Business School professor, reaffirms, updates, and extends the classic work with significant practical guidance for users of the framework.
Porter says that an understanding of an industry's competitive forces and their underlying causes is crucial component to strategy development, which is the building of defenses against the competitive forces or finding a position in an industry where the forces are weaker.
The forces he identifies are:
- Rivalry Among Existing Competitors
- Threat of Substitute Products or Services
- Threat of New Entrants
- Bargaining Power of Buyers
- Bargaining Power of Suppliers