What it shows
Porter’s five forces (Porter 1979, 2008) with rivalry among existing competitors at the center. Around it sit the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers and the threat of substitute products or services, each pointing in at the rivalry it shapes.
Under each force is a one-line meaning condensed from Porter (2008), then an example from the specialty coffee roasting industry as Northfield Coffee Roasters, a fictional roaster selling to cafes and online, would meet it.
How to read it
Start in the middle. Many regional roasters of similar size compete for the same cafe accounts, so rivalry is the force the other four push on.
Threat of new entrants (top): a new roaster needs only a small roasting machine and modest space, so entry is easy.
Supplier power (left) comes from a few importers who control the specialty green beans. Buyer power (right) comes from cafe groups, which buy in volume and can switch roasters easily.
Threat of substitutes (bottom): tea and energy drinks meet the same need for a caffeine lift by other means.
Together the five forces set how intense competition is, and so how profitable the industry is likely to be. That is the question Porter built the framework to answer.
The five forces
- Threat of new entrants: newcomers add capacity and put pressure on prices and costs.
- Bargaining power of suppliers: powerful suppliers charge more, limit quality or shift costs.
- Rivalry among existing competitors: rivals compete on price, new products, advertising and service.
- Bargaining power of buyers: powerful buyers force prices down or demand more.
- Threat of substitute products or services: other products meet the same need by a different means.
Ways to use it in teaching
Give students an industry they know. For each force, they pick one driver from Porter’s (2008) lists (entry barriers, supplier concentration, buyer switching costs and so on) and rate the force high or low.
Set the coffee example beside an industry with high entry barriers, such as commercial aircraft manufacturing, and ask what changes in each box, not only the top one.
Read the buyer box against the SWOT analysis example: the same cafe groups that hold buyer power here are weakness W3 there, where most wholesale sales come from a few of them. Ask whether one fact belongs in both analyses, and what each tool does with it.
Sources
- Porter, M. E. (1979, March–April). How competitive forces shape strategy. Harvard Business Review. https://hbr.org/1979/03/how-competitive-forces-shape-strategy
- Porter, M. E. (2008, January). The five competitive forces that shape strategy. Harvard Business Review, 86(1), 78–93. https://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy
- Porter's five forces analysis. (n.d.). In Wikipedia. Retrieved October 19, 2026, from https://en.wikipedia.org/wiki/Porter%27s_five_forces_analysis
