The Five Forces Model Framework

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The Five Forces model is a framework for analyzing the competitive environment in which a company works and therefore determining its profit potential. (The Economic Times) The framework is a tool designed by Michael Porter, which states that there are four separate forces: “The Threat of Entry”; “Supplier power”; “Buyer power”; “Threat of substitutes” and the “Degree of Rivalry.” (Porter’s Five Forces) This model can assist both new and existing companies in determining the profitability of a new product line and or a start up business. For example, an entrepreneur looking to develop a new business plan for marketing a particular set of clothing (e.g., t-shirts) both domestically and internationally will put his or her plan through the five forces frame work in order to determine the possible future success of his or her company based on the current market. The best way to go about answering this question is to run a mock company through the Five forces model framework in order to arrive at a simulated response. Let’s take for example Ted; Ted is a thirty five year old entrepreneur trying to make his claim in the online graphic tee-shirt business. Ted’s company is Teesfromted.com. His ambition is to sell domestically and internationally. Ted has a five person team consisting of family and friends. He has identified a market niche for 100% cotton t-shirts that display a new and graphic artwork. Ted has identified a supplier of cotton t-shirts and will use Fedex as
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