Porter's Five Forces — free online maker
Work out whether an industry is worth competing in, and where the profit leaks. Guided prompts on every block, autosave in your browser, and one-click PDF export.
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What is the Porter's Five Forces?
Porter's Five Forces asks a question most strategy tools skip: is this industry structurally capable of being profitable at all? Five forces determine that — rivalry between existing competitors, the threat of new entrants, the threat of substitutes, the bargaining power of buyers, and the bargaining power of suppliers.
The practical output is a judgement about where profit is leaking out of your industry and to whom. Strong buyers capture it. Strong suppliers capture it. Easy entry competes it away. Understanding which force is strongest tells you what your strategy has to defend against — and sometimes tells you not to enter at all.
Introduced by Michael E. Porter in a 1979 Harvard Business Review article and developed in Competitive Strategy (1980). It remains the standard framework for industry structure analysis in business education.
Use it when…
- Deciding whether to enter a new industry or segment
- Explaining why margins in your sector are structurally thin
- Investment analysis, where industry structure predicts sustainable returns
- Before pricing decisions — buyer power sets your ceiling
The 5 blocks, in the order to fill them
- 1
Competitive Rivalry
How hard do existing competitors fight?
The intensity of competition among firms already in the industry. High rivalry shows up as price competition, heavy marketing spend, and rapid feature matching.
How to fill this block - 2
Threat of New Entrants
How easily can someone new start competing?
How hard it is for a new competitor to enter and take share. Low barriers mean any profit you make attracts imitators, which caps your long-run returns even if today looks comfortable.
How to fill this block - 3
Threat of Substitutes
What else solves the same problem?
Different products or approaches that meet the same underlying need. The classic error is defining substitutes too narrowly — the substitute for a train journey is not another train company, it is a car, a plane, or a video call.
How to fill this block - 4
Bargaining Power of Buyers
How much leverage do customers have over price?
How much pressure customers can put on your margins. Buyer power rises when they are few and large, when your product is undifferentiated, when switching is easy, when they are price-sensitive, and when they could plausibly do it themselves.
How to fill this block - 5
Bargaining Power of Suppliers
How much leverage do your inputs have?
How much pressure suppliers can put on your costs. Supplier power rises when there are few of them, when their input is critical or unique, when switching is expensive, and when they could move downstream and compete with you directly.
How to fill this block
Worked Five Forces examples
Complete, realistic canvases with an analysis of what each one reveals. Open one on its own page, or load it straight into the editor above.
Five Forces FAQs
What are Porter's Five Forces?
Competitive rivalry, threat of new entrants, threat of substitutes, bargaining power of buyers, and bargaining power of suppliers. Together they determine how much profit an industry can sustain, and how that profit is divided between the firms in it, their customers, and their suppliers. Michael Porter introduced them in 1979.
How do I score each force?
Rate each as high, medium, or low, and — more importantly — write the reason beside the rating. A force marked 'high' with no evidence is an opinion. Where you have numbers, use them: customer concentration, number of suppliers, market share distribution, and switching costs are all measurable and settle most arguments.
How is this different from SWOT?
Five Forces analyses the industry; SWOT analyses your position within it. Five Forces tells you whether this is a good market to be in at all, which is a question SWOT never asks. Run Five Forces first when you are considering entry, then SWOT to work out how you would compete once inside.
Does the framework still apply to software and platforms?
Yes, though supplier power needs a broader reading — cloud providers, app stores, payment processors, and any API you depend on are suppliers with real leverage. Some analysts add a sixth force for complementors and network effects, which the original model handles only indirectly.