In this post, youвЂ™ll learn about the five different aspects of PorterвЂ™s Five Forces and how you can use them to create or strategize for your business. Not only that but if you already own a business, youвЂ™ll be able to understand your potential competition better. If you use PorterвЂ™s Five Forces, youвЂ™ll understand if a business idea is worth pursuing. Dating back to its publication in 1979, it has grown to become one of the most used business strategy tools in the world. When Michael Porter created PorterвЂ™s Five Forces, he intended businesses to use it to determine an industryвЂ™s profit potential and attractiveness. PorterвЂ™s Five Forces: Why Should I Use It? The lower these five forces, the more lucrative a business idea is. Michael Porter identified five forces that make up the competitive environment of a business landscape.

PorterвЂ™s Five Forces is a powerful tool, created by Harvard Business School professor Michael Porter, that was designed to understand the competitiveness of a business environment and enables individuals to identify potentially profitable opportunities. So, what is the best way to learn about your industry? Simple, through using porterвЂ™s five forces analysis. The goal is to learn as much as you can about your industry without succumbing to paralysis by analysis (see The Biggest Mistake Founders Make When Starting Their Business for more on paralysis by analysis). Without knowing the market forces at play, you will have a hard time staying ahead of your competition. Industry analysis is crucial for sound business management. To run your business efficiently, you need to know your market dynamics.

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