Porter’s Five Forces Powerpoint Template and Example

Porter's Five Forces is a tool for assessing the attractiveness and profitability of a market by analyzing the forces acting upon it.

It identifies and analyzes five competitive forces that shape every market/industry.
The five forces are competition in the industry, potential of new entrants into the industry, power of suppliers, power of customers and threat of substitute products.

Five Forces analysis can be used to guide business strategy to increase competitive advantage. The model was created by Harvard Business School professor Michael E. Porter in 1979 and has since become an important tool for managers.

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1. The overall competitive intensity of the Airline Industry is high 1 Key players Key insights Intensity High barriers due to capital investment, regulatory hurdles, and airport slot constraints. Established airlines have strong customer loyalty. Low Bargaining Power of Buyers Bargaining Power of Suppliers Threat of New Entrants Competitive Rivalry Threat of Substitution Overall Competitive Intensity High High High Medium High New budget airlines (e.g., Ryanair) Limited aircraft manufacturers (Boeing, Airbus) and fuel suppliers hold significant power. High dependency on long-term contracts. Aircrafts: Boeing, Airbus Fuel: ExxonMobil, BP Intense competition with frequent price wars. Differentiation is challenging beyond price and loyalty programs. Major airlines (e.g., Emirates, Qantas) Low-cost carriers (e.g., Southwest, Jetstar) Customers are price-sensitive with low switching costs. Competition from low-cost carriers strengthens buyer power. Economy passengers Corporate travelers High-speed trains and virtual meetings reduce demand for short-haul and business flights. Airlines rely on speed and convenience to compete. High-speed trains (e.g., Eurostar) Virtual meetings (e.g., Zoom) The airline industry is a classic example of a high-competition, low-margin environment. Each force exerts significant pressure, and players must continuously innovate to stay competitive. Real-life example for the Airline industry

2. Porter’s Five Forces

3. The Porter’s Five Forces tool helped us assess the attractiveness and profitability of our market/industry (1/2) 3 Porter’s 5 Forces Description Porter's Five Forces is a tool for assessing the attractiveness and profitability of a market by analyzing the forces acting upon it. It identifies and analyzes five competitive forces that shape every market/industry. The five forces are: Competition in the industry Potential of new entrants into the industry Power of suppliers Power of customers Threat of substitute products. Five Forces analysis can be used to guide business strategy to increase competitive advantage. The model was created by Harvard Business School professor Michael E. Porter in 1979 and has since become an important tool for managers. Competitive Rivalry New Entrants Substitutes Buyer Power Supplier Power

4. The Porter’s Five Forces tool helped us assess the attractiveness and profitability of our market/industry (2/2) 4 Porter’s 5 Forces Description Competitive Rivalry New Entrants Substitutes Buyer Power Supplier Power Competitive Rivalry: This force examines the intensity of the competition already present in an industry. The greater the rivalry, the harder it might be to enter the market and be profitable. Factors influencing this force include the number of competitors, the rate of industry growth, product or service complexity and uniqueness, and customer loyalty. Supplier Power: This force examines the power of the suppliers. When suppliers have more power, they can charge higher prices or demand more favorable terms. Factors influencing this force include the number of suppliers, the uniqueness of their product or service, their strength and control over you, the cost of switching from one to another, and the amount of effort required to switch. Buyer Power: This force looks at the power of the customers to drive prices down. If your customers have more power, your profitability may decrease. Factors influencing this force include the number of customers, their sensitivity to price, their bargaining power, the cost of switching, and their ability to substitute. Threat of Substitutes: This force considers the potential for your customers to find a different way of doing what you do. For example, if you offer a unique software product that automates an important process, people might substitute by doing the process manually or by outsourcing it. Factors influencing this force include the availability of substitute products or services, the cost of switching to substitutes, and the level of customer willingness to switch. Threat of New Entrants: This force examines the ability of people or businesses to enter your market. If it's easy for others to enter your market and compete effectively, then the attractiveness and profitability of the market decrease. Factors influencing this force include the cost of entry, the technology and specialized knowledge requirements, legal and regulatory barriers, access to distribution channels, and economies of scale.

5. Each force may increase or decrease the attractiveness of the market/industry 5 Bargaining power of Suppliers Bargaining power of Buyers Threat of new entrants Threat of Substitute products If the number of new entrants increases, the profit for all firms in the industry will tend to decrease The ability of customers to put pressure may force the firms in the industry to decrease their price The existence of products outside of the realm of the common product boundaries increases the propensity of customers to switch to alternatives Suppliers of raw materials, components, labor, and services to the firm can be a source of power which may result in an increase of the costs for all firms in the industry Intensity of competitive rivalry

6. The overall competitive intensity in the airline industry is [low, average or high] 6 Real-life example Intensity of Competitive Rivalry British Airways British Midland Dan Air Threat of New Entrants Foreign airlines National airlines New companies Threat of Substitute Products Bus, Rail, Car Video conferencing Bargaining Power of Buyers Business travelers Pleasure travelers Bargaining Power of Suppliers Fuel companies Aircraft companies Labor Catering suppliers Low Average High Competitive force intensity:

7. The overall competitive intensity of the Market XYZ is [ low, average or high] 7 Intensity of Competitive Rivalry Insert your own text Insert your own text Insert your own text Threat of New Entrants Insert your own text Insert your own text Insert your own text Threat of Substitute Products Insert your own text Insert your own text Insert your own text Bargaining Power of Buyers Insert your own text Insert your own text Insert your own text Bargaining Power of Suppliers Insert your own text Insert your own text Insert your own text Low Average High Version 1 Competitive force intensity:

8. The overall competitive intensity of the Market XYZ is [ low, average or high] 8 Version 2 Five Forces Intensity Description Threat of new entrants High Insert your own text Threat of substitute products Low Insert your own text Bargaining power of suppliers Insert your own text Medium Bargaining power of buyers Medium Insert your own text Competitive rivalry Insert your own text Low

9. The overall competitive intensity of the Market XYZ is [ low, average or high] 9 Version 3 To edit this chart: Double click on the chart Click on the tab “Design” Click on “Edit data”

10. The overall competitive intensity of the Market XYZ is [low, average or high] 10 Version 4 Key players Key insights Intensity Insert your own text Low Bargaining Power of Buyers Bargaining Power of Suppliers Threat of New Entrants Competitive Rivalry Threat of Substitution Overall Competitive Intensity High High High Medium High Insert your own text Insert your own text Insert your own text Insert your own text Insert your own text Insert your own text Insert your own text Insert your own text Insert your own text Insert your own text

11. The overall competitive intensity of the Airline Industry is high 11 Key players Key insights Intensity High barriers due to capital investment, regulatory hurdles, and airport slot constraints. Established airlines have strong customer loyalty. Low Bargaining Power of Buyers Bargaining Power of Suppliers Threat of New Entrants Competitive Rivalry Threat of Substitution Overall Competitive Intensity High High High Medium High New budget airlines (e.g., Ryanair) Limited aircraft manufacturers (Boeing, Airbus) and fuel suppliers hold significant power. High dependency on long-term contracts. Aircrafts: Boeing, Airbus Fuel: ExxonMobil, BP Intense competition with frequent price wars. Differentiation is challenging beyond price and loyalty programs. Major airlines (e.g., Emirates, Qantas) Low-cost carriers (e.g., Southwest, Jetstar) Customers are price-sensitive with low switching costs. Competition from low-cost carriers strengthens buyer power. Economy passengers Corporate travelers High-speed trains and virtual meetings reduce demand for short-haul and business flights. Airlines rely on speed and convenience to compete. High-speed trains (e.g., Eurostar) Virtual meetings (e.g., Zoom) The airline industry is a classic example of a high-competition, low-margin environment. Each force exerts significant pressure, and players must continuously innovate to stay competitive. Real-life example for the Airline industry

12. The overall competitive intensity of the Automobile Industry is high 12 Key players Key insights Intensity High capital requirements, brand loyalty, and economies of scale make it tough for new players to enter. But the shift between fuel cars and EV cars gave an opportunity for new companies to emerge Medium Bargaining Power of Buyers Bargaining Power of Suppliers Threat of New Entrants Competitive Rivalry Threat of Substitution Overall Competitive Intensity Medium High High Medium High Tesla Chinese EV cars (e.g.,) BYD Dependency on specialized parts (e.g., batteries for EVs) gives certain suppliers leverage. Semiconductor manufacturers (e.g., TSMC) Battery suppliers (e.g., CATL) Intense competition due to saturated markets, price wars, and the push towards electric vehicles (EVs) Established automakers (e.g., Honda, Tesla) EV disruptors (e.g., Rivian) Consumers have numerous choices and are increasingly price-conscious and quality-focused. Individual car buyers Corporate fleets (e.g., rental companies) Public transport, ride-sharing (e.g., Uber), and micromobility (e.g., e-scooters) are viable alternatives in urban areas. Public transportation providers Ride-share platforms Competitive pressure is high due to cost sensitivity, evolving technologies, and environmental regulations. Real-life example for the Automobile industry

13. The overall competitive intensity of the Management Consulting Industry is high 13 Key players Key insights Intensity Low capital requirements but significant barriers like brand reputation, client trust, and expertise. Medium Bargaining Power of Buyers Bargaining Power of Suppliers Threat of New Entrants Competitive Rivalry Threat of Substitution Overall Competitive Intensity Low High High Medium High Boutique consultancies and niche freelancers entering the market. Suppliers (e.g., software providers, tools) have limited influence as consultants rely primarily on human capital. Technology vendors like Salesforce or industry data providers like Gartner. Intense competition among global giants (e.g., McKinsey, BCG, Bain) and regional/boutique firms. Big Four firms (PwC, Deloitte), strategy firms (McKinsey, Bain), and boutique agencies. Clients have numerous options and the ability to negotiate fees Corporate clients, government bodies, and SMEs seeking strategy or operational guidance. Alternatives like in-house consulting teams and self-service tools are growing. Internal corporate teams, SaaS solutions for project management and strategy. Competitive pressure is driven by the need for specialization, pricing pressures, and evolving client demands. Real-life example for the Management Consulting industry

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