1. Chapter 5 Industry, Market & Competitive Feasibility Analysis:
Evaluating Industry Attractiveness via
Porter’s Five Forces Model: How to Reach a Conclusion
Diane M. Sullivan, Ph.D., 2010
Sections modified from Hitt, Ireland, and Hoskisson, Copyright © 2008 Cengage

2. Porter’s Five Forces: Overall Analysis
Based on your analysis, rate each force from -5 (really bad, poor profit potential to +5 (great, excellent profit potential)
Five Forces Overall Analysis
Intensity of Rivalry Rating:
Power of Suppliers Rating:
Power of Buyers Rating:
Threat of New Entrants Rating:
Threat of Substitutes Rating:
Sum of Ratings:
Scores between +10 to +25  Generally Attractive and High Profit Potential
Scores between -6 to +9  Generally Moderately Attractive and Moderate Profit Potential
Scores less than -6  Generally Unattractive and Low Profit Potential

3. Porter’s Five Forces: Overall Analysis Example
Based on your analysis, rate each force from -5 (really bad, poor profit potential to +5 (great, excellent profit potential)
Five Forces Overall Analysis
Intensity of Rivalry Rating:
-4 to -5
Power of Suppliers Rating:
-3 to -5
Power of Buyers Rating:
-1 to -3
Threat of New Entrants Rating:
0 to -2
Threat of Substitutes Rating:
+1 to -3
Sum of Ratings:
-7 to -18
Scores between +10 to +25  Generally Attractive and High Profit Potential
Scores between -6 to +9  Generally Moderately Attractive and Moderate Profit Potential
Scores less than -6  Generally Unattractive and Low Profit Potential
These results would suggest that the industry is not attractive and prospects for long-term profitability for the industry are low.

4. Industry Analysis Feasibility Assignment Deliverables
For Checkpoint #3 (due Thur., November 11, 2010)
Determine the industry within which your firm will compete
Compile general information about the industry (e.g., industry size, growth rate, number of competitors, market share across competitors, etc.)
Conduct a Porter’s Five Forces Analysis on the industry
Determine how each separate force impacts the industry’s attractiveness and prospects for long-term profitability
Determine the overall industry attractiveness and prospects for long-term profitability based on the analysis