Abstract
In 1979, a new model was developed for the industry analysis and for the business strategy development: Porter's 5 Forces model. This framework is named after its creator Michael Porter who is a university professor specialized in strategy at Harvard Business School. The model was published for the first time in a book called "Competitive Strategy: Techniques for analyzing industries and competitors" written by Michael Porter himself. He is famous for his main studies focused on how a firm could develop a competitive strategy to obtain a competitive advantage by mastering better than its rivals and understanding the forces which structure its competitive environment. Therefore, he built several strategic tools which are the value chain, the generic tree strategies, the market positioning strategies, strategic groups, Porter's clusters of competence for regional economic development and of course Porter's Five Forces Analysis.
Since the beginning, Porter's Five Forces which has become a reference in analyzing the power of the forces is governing the market. He has identified five competitive forces which recover all kind of markets. Three of Porter's five forces refer to competition from external sources. The remainder is internal threats. Porter referred to these forces as the micro environment. These forces are the intensity of competitive rivalry within an industry, the threat of new entrants and of substitute products, the bargaining power of the customers and suppliers. They consist of those forces close to a company that affect its ability to serve its customers and make profit.... Each of these forces helps to understand the nature of the intensity of the competition present on a market and how this market is or not attractive and profitable. Attractiveness in this context refers to overall industry profitability. "An "unattractive" industry is one in which the combination of these five forces act to drive down overall profitability. A very unattractive industry would be one approaching "pure competition", in which available profits for all time are driven down to zero." The overall industry attractiveness does not imply that every firm in the industry will return the same profitability.
