# Porter's Five Forces Canvas

**Framework:** Porter's Five Forces  
**Use for:** Industry attractiveness analysis — understanding the competitive dynamics in a market before entering, investing, or making strategic decisions about where to compete.  
**Time required:** 60–90 minutes with domain knowledge of the industry. Requires actual research to be useful.

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## How to use this template

1. **Name the industry clearly.** "Software" is not specific enough. "Cloud-based HR software for mid-market companies" is. The more specific the scope, the more useful the analysis.
2. **Rate each force.** After assessing each force, assign a simple rating: High / Medium / Low pressure on profitability. The ratings relative to each other matter more than the absolute labels.
3. **Research first, fill second.** This framework is only as good as your knowledge of the industry. Filling it in from assumptions produces confident-looking nonsense.
4. **Revisit annually.** Industry dynamics shift. A force that was Low a few years ago may be High today (e.g., AI entering a traditionally low-tech industry).
5. **Use it to inform where to play.** Industries with multiple High-pressure forces are structurally unattractive. Industries with Low-pressure forces in most dimensions tend to produce higher average returns.

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## Industry being analyzed

**Industry / market:**

> _[Example: B2B SaaS HR software — mid-market segment (200–2,000 employees)]_

**Date:** _______________  
**Prepared by:** _______________

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## Force 1: Competitive Rivalry

**Question:** How intense is competition among existing players?

**Pressure on profitability:** ☐ High  ☐ Medium  ☐ Low

**Assess:**
- Number of competitors of similar size: _______________
- Rate of industry growth (slow growth = more fighting for share): _______________
- Degree of product differentiation: _______________
- Switching costs for customers: _______________
- Exit barriers (what keeps weak players competing anyway): _______________

**Summary:** _______________

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## Force 2: Threat of New Entrants

**Question:** How easy is it for new competitors to enter this market?

**Pressure on profitability:** ☐ High  ☐ Medium  ☐ Low

**Assess:**
- Capital requirements to enter: _______________
- Regulatory barriers or licensing requirements: _______________
- Brand loyalty / customer switching costs: _______________
- Access to distribution channels: _______________
- Incumbents' ability to retaliate: _______________
- Network effects or economies of scale protecting incumbents: _______________

**Summary:** _______________

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## Force 3: Bargaining Power of Buyers

**Question:** How much leverage do customers have to push prices down or demand more?

**Pressure on profitability:** ☐ High  ☐ Medium  ☐ Low

**Assess:**
- Customer concentration (few large buyers vs many small ones): _______________
- Availability of substitutes for what we sell: _______________
- Buyer's price sensitivity: _______________
- How important our product is to the buyer's business: _______________
- Buyer's ability to produce the product themselves (backward integration): _______________

**Summary:** _______________

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## Force 4: Bargaining Power of Suppliers

**Question:** How much leverage do our suppliers have to raise prices or reduce quality?

**Pressure on profitability:** ☐ High  ☐ Medium  ☐ Low

**Assess:**
- Number of suppliers relative to buyers: _______________
- Uniqueness of what suppliers provide: _______________
- Cost to switch suppliers: _______________
- Suppliers' ability to sell directly to our customers (forward integration): _______________
- Our importance as a customer to our suppliers: _______________

**Summary:** _______________

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## Force 5: Threat of Substitutes

**Question:** How easily can customers meet the same need with a different product or approach?

**Pressure on profitability:** ☐ High  ☐ Medium  ☐ Low

**Assess:**
- What substitutes exist (not just competitors, but alternative approaches): _______________
- Price-performance of substitutes vs. our product: _______________
- Buyer's propensity to substitute (how habit-bound are they): _______________
- Switching cost from our product to a substitute: _______________

**Summary:** _______________

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## Overall Assessment

| Force | Rating | Key driver |
|---|---|---|
| Competitive rivalry | | |
| Threat of new entrants | | |
| Bargaining power of buyers | | |
| Bargaining power of suppliers | | |
| Threat of substitutes | | |

**Industry attractiveness overall:** ☐ Attractive (mostly Low-pressure forces)  ☐ Mixed  ☐ Unattractive (mostly High-pressure forces)

**Key strategic implications:**

1. _______________
2. _______________
3. _______________

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*Porter's Five Forces is a framework developed by Michael E. Porter, described in his 1979 Harvard Business Review article "How Competitive Forces Shape Strategy." Covered in depth in the Frameworks & Mental Models Guide on biztechprimer.com.*