Porter's Five Forces is a framework developed by Michael Porter that helps analyse the competitive intensity and attractiveness of an industry. Here's how you can use the framework to review your market attractiveness and strength of proposition:

1. Threat of New Entrants: Assess the barriers to entry in the industry. This includes factors such as economies of scale, capital requirements, brand loyalty, access to distribution channels, and government regulations. Identify how easy or difficult it is for new competitors to enter the market. A high barrier to entry means less threat from new entrants. A low barrier to entry increases the risk of competition.
2. Bargaining Power of Suppliers: Evaluate the power suppliers have over your business. Consider the number of suppliers available, the uniqueness of their products or services, the availability of substitutes, and the importance of their inputs to your business. If suppliers have significant power, they may be able to dictate terms or raise prices, impacting your profitability.
3. Bargaining Power of Buyers: Analyse the power buyers have in the industry. This includes factors such as the number of buyers, their price sensitivity, the importance of your product or service to them, and the availability of substitutes. If buyers have significant power, they may demand lower prices or higher quality, affecting your profitability.
4. Threat of Substitutes: Identify potential substitutes for your client's product or service. Consider factors such as price-performance trade-offs, switching costs, and customer loyalty. The availability of substitutes can limit your ability to raise prices or differentiate their offering. We live in a world of industry disruptors where new technology can make traditional businesses redundant very quickly. Think of Blockbuster Video and the impact of Netflix!
5. Rivalry Among Existing Competitors: Evaluate the intensity of competition within the industry. Consider factors such as the number of competitors, their size and diversity, growth rates, and exit barriers. High rivalry can lead to price wars, aggressive marketing tactics, and reduced profitability for your client.

Once you've analysed each of these forces, you can use the insights gained for strategic decisions and your marketing plan:

• Identify Opportunities and Threats: Highlight areas where your client can capitalise on opportunities or where they may face threats. For example, if the threat of new entrants is low, you may have a more stable market position.
• Formulate Competitive Strategy: Based on the analysis, develop a competitive strategy that leverages strengths and mitigates weaknesses. This could involve focusing on differentiation, cost leadership, or niche markets.
• Allocate Resources Wisely: Allocate resources to areas where you can have the most significant impact. For instance, if suppliers have high power, your may need to invest in building strong supplier relationships or diversifying your supplier base.
• Develop Marketing Tactics: Tailor marketing tactics to address specific forces. For example, if buyers have high power, you may need to focus on building brand loyalty or offering additional value-added services to differentiate your business.

By utilising Porter's Five Forces framework, you can gain a deeper understanding of your industry's competitive dynamics and develop a more robust strategic plan and marketing strategy.

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