DEFINITION of Porter’s ‘Six Forces Model’
A strategic business tool that helps businesses evaluate the competitiveness and attractiveness of a market. The six force model provides an industry-view and analyzes six key areas:
Competition – Information regarding present competition
New Entrants – Information regarding the ease with which new competition could enter the market
End Users/Buyers – Information regarding the buyers’ abilities to affect price
Suppliers – The number and type of sellers
Substitutes – The ease by which a product or service can be substituted
Complementary Products – The impact of related products and services already in the market
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