Why Porter’s 5 Forces Should Follow PESTLE in Strategic Planning

Assessing Market Attractiveness in a Disrupted World: PESTLE + Porter’s 5 Forces

In today’s fast-changing business environment, no market stays the same for long. Technology, economic shocks, global supply chain issues, and shifts in consumer behaviour are reshaping entire industries overnight. To succeed, businesses must not only plan but also strategically assess their market’s long-term viability.

Two powerful tools can help you do just that: PESTLE and Porter’s 5 Forces.

Why Start with PESTLE?

PESTLE (Political, Economic, Social, Technological, Legal, and Environmental analysis) helps you scan the external macro-environment. It’s where you identify big trends and forces outside of your direct control—things like new regulations, changing consumer behaviour, or technological disruption.

For example:

• Technology: AI tools are disrupting traditional service businesses by automating tasks previously done by people.
  
  
• Environmental: Stricter carbon regulations are forcing industries to innovate in logistics and supply chains.
  
  

PESTLE gives you a helicopter view of where the winds of change are blowing.

Enter Porter’s 5 Forces

Once you understand the macro-environment, you need to zoom in on your industry dynamics. This is where Porter’s 5 Forces comes into play.

Porter’s framework analyses the attractiveness and competitiveness of a market by examining:

1. Threat of New Entrants – How easily can new players disrupt the market?
   
   
2. Bargaining Power of Suppliers – Are suppliers consolidating power or being replaced by tech-driven platforms?
   
   
3. Bargaining Power of Buyers – Are customers expecting more for less, or do they have plenty of alternatives?
   
   
4. Threat of Substitutes – How likely are innovative alternatives to replace your product or service?
   
   
5. Industry Rivalry – Is price-cutting, aggressive marketing, or digital disruption intensifying competition?
   
   

Why This Matters in 2025

In almost every sector, disruptors are rewriting the rules. Think of Netflix vs. Blockbuster, Airbnb vs. hotels, or electric vehicles challenging the petrol car market. Technology is breaking traditional distribution models, shifting power dynamics between suppliers and buyers.

By using PESTLE first, you understand the big-picture trends. By applying Porter’s 5 Forces next, you evaluate how those trends impact market attractiveness and competitive positioning.

How to Apply This in Your Business

• Start with a PESTLE workshop – map out the key external forces impacting your sector.
  
  
• Follow up with a Porter’s 5 Forces session – identify where threats and opportunities exist in your industry structure.
  
  
• Use insights for strategic planning – decide where to focus your marketing, investment, and innovation efforts.
  
  

Want help assessing your market's attractiveness?
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I help businesses create actionable strategic plans based on proven frameworks like PESTLE and Porter’s 5 Forces.

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If you would like to discuss strategic analysis for your business, book a free consultation here.

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