Five Forces

Abstract

A five-forces analysis provides a basis to evaluate and understand an industry and its broad set of participants including suppliers, customers, and competitors. It provides a means for managers to assess the major factors impacting an industry’s profit potential and may help highlight ways that a firm may increase its economic returns relative to the other industry participants. This chapter discusses the underlying theory, core idea, depiction, process, insight or value created, and risks and limitations of a five-forces analysis. Finally, the chapter describes the industry context confronting of Harley-Davidson and applies the steps of five-forces analysis to this case.