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3.3AdvancedModule 03 · Know Your Market

Porter's Five Forces

Understand the true profitability and power dynamics of your industry

The prompt

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3.3Porter's Five Forces
Act as a strategic industry analyst using Porter's Five Forces. Industry : [YOUR SPECIFIC INDUSTRY be precise] My position : [WHAT YOU DO, YOUR SIZE, YOUR SEGMENT] Analyse all five forces: COMPETITIVE RIVALRY : How intense is competition? THREAT OF NEW ENTRANTS : How easy to enter this market? THREAT OF SUBSTITUTES : What else could customers use? BUYER POWER : How much leverage do buyers have? SUPPLIER POWER : How much leverage do suppliers have? Rate each force : Low / Medium / High. Identify the most dangerous force for my specific position. Suggest 2 strategic moves to reduce the impact of the highest-threat force on my business. Porter's Five Forces Analysis No legal factors No political factors No legal factors No political factors No environmental Industry Rivalry factors Competition impacts No environmental factors profitability No technological factors No social factors No social factors No technological factors
LabelsReplace theseSwap the role below

LabelsReplace theseSwap the role below

Pro tip, from the book

The most overlooked force is Threat of Substitutes. Customers don't just compare you to competitors, they compare you to doing nothing, doing it manually, or using a completely different category. Ask AI specifically: 'What are the non-obvious substitutes for my product that I might be underestimating?'

Who should run this prompt

Module role profile

Who should read your competitive landscape? Every market looks different depending on where you are standing. A market researcher sees data. A competitor's strategist sees opportunity. A customer sees none of your positioning — only their own problem. Use this page to choose the right lens before drawing any conclusions about the market you operate in.

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See also: 1.3 Role Prompting - The Expert Chair

Use this when

The problem it solves

You want to understand why some businesses in your industry are profitable and others aren't or you're deciding whether to enter or exit a market and need a rigorous structural analysis.

How the framework works

From the printed page

Developed by Michael Porter at Harvard Business School in 1979, the Five Forces model maps the structural forces that determine industry profitability: Competitive Rivalry (intensity of competition), Threat of New Entrants (how easy is it to enter?), Threat of Substitutes (what else could customers use?), Bargaining Power of Buyers (how much power do customers have?), Bargaining Power of Suppliers (how much power do your suppliers have?). The collective strength of these forces determines the long-run profit potential of an industry. Porter's insight was that profitability is not random it is structural. A brilliant strategy in a structurally weak industry will always underperform a mediocre strategy in a structurally strong one.

The method, in four moves

Do these in order
1

Assess each force on a scale of Low, Medium, or High intensity.

2

Identify which force is most dangerous to your specific position.

3

Look for forces you can influence through strategic action, not all forces are fixed.

4

Use the output to decide where to build your moat. Five Forces maps the industry you are in today, not the one you are building toward. Analysing the wrong industry boundary is the most common mistake when applying this framework.

Where the framework comes from

Michael Porter, Harvard Business School — Competitive Strategy, 1979

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