Using Porter’s Five Forces to Assess Market Competition Excel Template

Introduction
In today’s competitive business environment, leaders need more than intuition to make strategic decisions. One of the most enduring tools for assessing market competition is Porter’s Five Forces, developed by Professor Michael Porter of Harvard Business School. It provides a structured way to analyze the external forces shaping profitability in an industry.

Porter identified Five Forces that give rise to Market Competition.

These Five Forces are:

1. Threat of New Entrants – How easy is it for new competitors to enter the market and erode profits?
2. Bargaining Power of Suppliers – Can suppliers increase costs or reduce quality?
3. Bargaining Power of Buyers – Do customers have the power to demand lower prices or better service?
4. Threat of Substitute Products or Services – Are alternatives available that customers might prefer?
5. Industry Rivalry – How intense is the competition among current players?

Why It Matters
Assessing these forces helps executives:

• Identify the key pressures on profitability
• Understand where to focus defensive or offensive strategies
• Decide whether to enter, remain, or exit a market

Practical Application
Executives can map each force on a simple scoring grid (e.g., high/medium/low pressure) and then prioritize responses. Our Excel-based strategy templates allow managers to input their assessments, visualize results, and generate reports for boardroom discussions without needing complex software.

Conclusion
Porter’s Five Forces remains a powerful lens to view market competition. By applying it systematically, businesses can gain a deeper understanding of their industry’s dynamics and craft strategies that align with long-term profitability.