Porter's Five Forces model is used for what purpose?

Porter's Five Forces model is primarily designed to analyze competitive forces within an industry, making it a vital tool for understanding the dynamics of market competition. It focuses on five key factors that affect the competitive landscape: the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitute products or services, and the intensity of competitive rivalry among existing firms.

By evaluating these forces, businesses can identify the strengths and weaknesses of their industry environment, which helps in crafting effective strategies that enhance competitive advantage and long-term profitability. This model serves as a foundational framework for strategic management, guiding organizations in their decision-making processes regarding market entry, market positioning, and resource allocation.