porters-five-forces

Michael Porter's Five Forces assesses an industry's structure and profit potential: the stronger the forces, the lower the profit an average competitor can sustain. It corrects the mistake of judging an industry by its growth or hype instead of the structural forces that actually set its returns.

The five forces, their determinants, and the 1-to-5 scoring rubric live in references/forces.md. Load that file before analyzing and score each force against its determinants exactly.

When to use

The user wants to understand the competitive structure or attractiveness of an industry or market, evaluate entering or exiting one, or ground a strategy in industry structure. The unit of analysis is an industry, not a single company. If the user names a company, analyze the industry that company competes in, then translate the findings into implications for that company.

Language

Conduct the session and write the report in the language the user is writing in. The reference file is English; keep the framework and scoring keyed to it regardless of the output language.

Inputs

• INDUSTRY (required): the market to analyze. Push for a defined product or service in a defined geography, since "the software industry" is too broad to score. If the user is vague, narrow it with one or two questions first.
• CONTEXT (optional): the firm's position in the industry (incumbent, entrant, supplier, buyer), the time horizon, and the decision the analysis should inform. This shapes the strategic implications, not the force scores.