How do I apply Porter's Five Forces without it just being a description?
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The question
My feedback on a strategy report said my Five Forces section was 'descriptive, not analytical'. I listed each force and explained what was happening in the industry.
I do not understand what else I was supposed to do.
Short answer
Rate each force as high, medium or low, justify the rating with evidence, and then say what it means for the industry's profitability and for the specific firm. Analysis is the 'so what', not the list.
Full expert answer
Strategy module tutor
MBA, Fellow of the HEA
That feedback is the most common one on Five Forces sections, and it has a precise fix. Describing a force tells the marker what exists. Analysing it tells them how strong it is, why, and what follows from that.
Give every force a rating and a reason
For each of the five, state whether the pressure is high, medium or low, then give two or three pieces of evidence. For buyer power, that might be concentration of buyers, switching costs and price sensitivity. Numbers help: market share figures, the number of suppliers, or typical contract lengths.
Link the ratings to profitability
Porter's point is that the combined strength of the forces explains why some industries earn more than others. After the five ratings, add a paragraph that pulls them together: is this an attractive industry to compete in, and which force is doing the most damage to margins?
Finish with implications for the firm
- Which force should the firm try to weaken, and how?
- Does the analysis support or undermine its current strategy?
- What does it suggest for your later recommendations section?
This answer explains a method for you to apply to your own work. Copying it into a submission would count as plagiarism, and it is indexed by similarity checkers.
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