Porter’s 5 forces analyze the competitive landscape, examining the five primary elements motivating your industry or market.

But more specifically, why do we use Porter’s 5 forces? If you’re asking yourself, what is Porter’s 5 forces used for, just know that competitive strategy is the name of the game. A Porter’s 5 forces diagram helps you understand where your brand fits into the market and how to differentiate yourself from competitors. It also clarifies your relationship dynamic with other industry players.

Start with our Porter’s 5 forces analysis template, which divides the canvas into five sections—each of the five critical forces. Fill the boxes on your Porter’s 5 forces model template with both quantitative and qualitative elements; for example:

- The size of the industry

- The number of existing competitors

- The unique characteristics of a supplier’s products

- The barriers to entering a certain market

So when is Porter’s 5 forces used? It’s a high-level document determining your overall business strategy, most helpful when exploring new business directions and potential opportunities.

The Porter’s 5 forces diagram template shows how your company relates to other players in the market according to five key factors:

- Threat of new market entrants

- Threat of substitute products and services

- Intensity of industry rivalry

- Bargaining power of buyers

- Bargaining power of suppliers

So what is Porter’s 5 forces analysis example like? The Porter’s 5 forces model example elaborates on each section with significant details. The section on substitute products, for instance, may include the number of available products, the cost of switching providers, the viability of said products, and more.