Business Plan

Porter’s Five Forces of
Competitive Analysis
Business Enterprise
Michael E. Porter
•The Five Forces of Competitive Analysis

was developed in 1979
•as a framework or a guide for assessing
and evaluating the competitive
strength and position of a business
organization.
• Under Porter’s theory, he identifies five forces that
determine the competitiveness and attractiveness
of a market and which seek to locate the power in
a business situation, its current competitive
position, and the strength of a position that an
organization may enter into. These five forces help
in identifying if new products or services are
potentially profitable.
The Five Forces
1.Number of Competitors
2.Potential New Entrants
3.Power of Suppliers
4.Power of Customers
5.Threats of Substitutes Products
Directions:Identify and classify the following factors as to whether
they are considered as STRENGTH, a WEAKNESS, an OPPORTUNITY,
or a THREAT.
_____1. Entry of cheaper products.

_____2. Entry of new competitors .
_____3. Skilled and experienced leaders .
_____4. New programs of the government.
_____5. Lack of training for workers .
Market Research
Market Research
- is the process of gathering information
about your potential customers, your target
market, and understand the viability of your
business.
It will help you define your buyer persona by
answering questions like — Who are they? What
are their buying and shopping habits? How many
of them are there?
How to do market
research?
1. Start by identifying your
target market, ideal
customers and common traits.
2. Choose the type of research
data and sampling method you
will use.
1. Primary sources
- This involves going directly to a
source .
usually customers and prospective
customers in your target market
– to ask questions and gather information.

2. Secondary sources
-are those that have already been
compiled and are available
1. Primary sources
- This involves going directly to a
source .
usually customers and prospective
customers in your target market
– to ask questions and gather information.

The Business Plan
Business Plan
is a written description of
your business's future.
defines it as a written document
describing the nature of the business,
the sales and marketing strategy, and
the financial background, and
containing a projected profit and loss
statement.
Why is a Business Plan Important?
1. To help you with critical decisions.
2. To iron out the kinks.
3. To avoid the big mistakes.
4. To prove the viability of the
business.
5. To set better objectives and
benchmarks.
6. To communicate objectives and
benchmarks.
7. To provide a guide for service
providers.
8. To secure financing.
9. To better understand the broader
landscape.
10. To reduce risk.
Questions Every Business Plan
Should Answer
1.Why are you in business? Talk about
your mission. What drives you and
the business— beyond revenue and
profits?
Should Answer
2. What does the market look like? Discuss
who your potential customers are, and what
pain points they have that only you can solve.
Analyze your competition— their business,
their performance, and their weaknesses.
How does your business idea fit into the
market in relation to them?
Should Answer
3. What will you do? Detail how your
business is different from what’s out
there. Explain what you’ll offer, how
you’ll solve customer problems, and how
the market will respond to your business.
How will the industry change when you
enter it?
Should Answer
4. How will you grow? This is where you’ll
specify financials, projections, and where
you expect the company to be in the
future. You should also include plans for
how the business will scale. Who will you
need to hire and what will their
responsibilities entail?
Should Answer
5. What do you need? Finish with your
ask. Talk about what you need (financial
investment, a loan, a partnership, etc.),
how you’ll use it, and what you’re
offering in return (equity, collateral,
etc.). Where will that investment take
your business?

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Porter’s Five Forces of

•The Five Forces of Competitive Analysis

_____1. Entry of cheaper products.

– to ask questions and gather information.

– to ask questions and gather information.

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