Herramientas De Analisis Estrategico

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Awareness of the five forces can help a company understand the structure of its industry and stake out a position that is more profitable and less vulnerable to attack.

The Five Competitive Forces That Shape Strategy
by Michael E. Porter

Included with this full-text Harvard Business Review article: 1 Article Summary The Idea in Brief—the core idea The Idea inPractice—putting the idea to work 2 The Five Competitive Forces That Shape Strategy 18 Further Reading A list of related materials, with annotations to guide further exploration of the article’s ideas and applications

Reprint R0801E

The Five Competitive Forces That Shape Strategy
The Idea in Brief
You know that to sustain long-term profitability you must respond strategically to competition. Andyou naturally keep tabs on your established rivals. But as you scan the competitive arena, are you also looking beyond your direct competitors? As Porter explains in this update of his revolutionary 1979 HBR article, four additional competitive forces can hurt your prospective profits: • Savvy customers can force down prices by playing you and your rivals against one another. • Powerful suppliersmay constrain your profits if they charge higher prices. • Aspiring entrants, armed with new capacity and hungry for market share, can ratchet up the investment required for you to stay in the game. • Substitute offerings can lure customers away. Consider commercial aviation: It’s one of the least profitable industries because all five forces are strong. Established rivals compete intensely onprice. Customers are fickle, searching for the best deal regardless of carrier. Suppliers—plane and engine manufacturers, along with unionized labor forces—bargain away the lion’s share of airlines’ profits. New players enter the industry in a constant stream. And substitutes are readily available—such as train or car travel. By analyzing all five competitive forces, you gain a complete picture ofwhat’s influencing profitability in your industry. You identify game-changing trends early, so you can swiftly exploit them. And you spot ways to work around constraints on profitability— or even reshape the forces in your favor.

The Idea in Practice
By understanding how the five competitive forces influence profitability in your industry, you can develop a strategy for enhancing your company’slong-term profits. Porter suggests the following: POSITION YOUR COMPANY W HERE THE FORCES ARE WEAKEST Example: In the heavy-truck industry, many buyers operate large fleets and are highly motivated to drive down truck prices. Trucks are built to regulated standards and offer similar features, so price competition is stiff; unions exercise considerable supplier power; and buyers can usesubstitutes such as cargo delivery by rail. To create and sustain long-term profitability within this industry, heavy-truck maker Paccar chose to focus on one customer group where competitive forces are weakest: individual drivers who own their trucks and contract directly with suppliers. These operators have limited clout as buyers and are less price sensitive because of their emotional ties to andeconomic dependence on their own trucks. For these customers, Paccar has developed such features as luxurious sleeper cabins, plush leather seats, and sleek exterior styling. Buyers can select from thousands of options to put their personal signature on these built-to-order trucks. Customers pay Paccar a 10% premium, and the company has been profitable for 68 straight years and earned a long-run returnon equity above 20%. EXPLOIT CHANGES IN THE FORCES Example: With the advent of the Internet and digital distribution of music, unauthorized downloading created an illegal but potent substitute for record companies’ services. The record companies tried to develop technical platforms for digital distribution themselves, but major labels didn’t want to sell their music through a platform owned by a...