Updating Michael Porter's Classic 'Five Forces'

Last Updated Jan 7, 2008 9:28 AM EST

By significantly broadening how we think about competition, Michael E. Porter's Harvard Business Review article "How Competitive Forces Shape Strategy" launched a business management revolution among academics and practicioners when it was published in 1979 . The power of the concept, as time has born out, is that it can be extended to any industry: high tech, manufacturing, service, and even to competition on the scale of country against country.

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:

  1. Rivalry Among Existing Competitors
  2. Threat of Substitute Products or Services
  3. Threat of New Entrants
  4. Bargaining Power of Buyers
  5. Bargaining Power of Suppliers
In a video interview, Porter discusses in a down-to-earth manner the five forces in a number of industries including the airline business, and how managers can put the concept to good use.
  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.