How to Use Porter’s Five Forces to Outsmart the Competition

Before you launch, pivot, or expand—analyze the battlefield.

Let’s cut the fluff.

You can have a killer product, a great team, and early traction—but if you enter the wrong market, you’re toast.

It’s not enough to be good. You need to know what you’re up against—and whether the game is winnable.

That’s where Porter’s Five Forces comes in. It’s one of the most powerful strategy tools ever built. And if you’re not using it, you’re flying blind.

Here’s the Myford breakdown—no jargon, no MBA filler, just what you need to make smarter business moves.

What Are Porter’s Five Forces?

Developed by Harvard professor Michael Porter, this framework helps you evaluate how attractive—or brutal—an industry really is.

It looks at five forces that squeeze your profits:

1. Industry Rivalry – Are you battling in a price war or wide open space?
2. Threat of New Entrants – Can anyone jump in and compete tomorrow?
3. Threat of Substitutes – Can customers replace you with something else?
4. Buyer Power – Can customers demand discounts or better terms?
5. Supplier Power – Can your vendors jack up your costs?

Each of these forces eats into your margin, control, and long-term survivability.

Why It Matters

Because strategy starts with choosing the right game.

Too many entrepreneurs build in crowded, low-margin, or undifferentiated markets—and then wonder why they’re stuck in a grind.

Porter’s model lets you assess:

• How hard it’ll be to win
• How much pricing power you really have
• What kinds of threats could wipe you out

The more intense the forces, the less attractive the market.

A Quick Breakdown

Here’s how to use each force:

1. Industry Rivalry

• Are there lots of competitors?
• Is the market growing or stagnant?
• Are products similar?

High rivalry = low profits.
Think airlines or telecom—everyone’s fighting over scraps.

2. Threat of New Entrants

• How hard is it to enter your market?
• Are there barriers like capital, licenses, or regulation?

Low barriers = lots of new players.
If anyone can replicate your offer, you’re not safe.

3. Threat of Substitutes

• What else solves the same problem you do?
• Are those options cheaper or easier?

Substitutes erode loyalty and pricing power.
Energy drinks compete with coffee. Gyms compete with home workouts. Uber competes with bikes, buses, and walking.

4. Bargaining Power of Buyers

• Do customers have lots of options?
• Can they demand better terms?

The more power buyers have, the harder it is to scale profits.
Big-box retailers squeeze suppliers. Consumers on Amazon bounce between options with a click.

5. Bargaining Power of Suppliers

• Are there only a few suppliers for what you need?
• Can they raise prices or cut off your supply?

High supplier power = risk to your margins and operations.
Especially if you rely on specialized or hard-to-source materials.

Real-Life Snapshot

Thinking of launching a new premium energy drink?

Let’s apply the Five Forces:

• Rivalry – High. Tons of competition.
• New Entrants – Medium. Some barriers, but not enough.
• Substitutes – High. Coffee, supplements, water, smoothies.
• Buyer Power – High. Retailers and consumers have leverage.
• Supplier Power – Medium. Organic ingredients are niche.

Conclusion: Tough market. Unless you have something wildly differentiated or a loyal audience, you're in for a fight.

Your Action Step

Audit your market using the Five Forces.

Ask:

• Am I playing in a winnable space?
• Can I defend against threats?
• Where am I vulnerable?
• What force will eat my margins if I don’t act?

Use this tool before you build, before you scale, and every time the market shifts.

Smart businesses don’t just compete. They position themselves to win.

Final Word

At Myford University, we don’t teach you theory for the sake of sounding smart. We teach you what works in the real world—in real markets, with real pressure.

Porter’s Five Forces is how you think like a strategist—not a technician.

Use it. Apply it. Revisit it.
And most importantly—act on what it reveals.

Want to read the full article? Find it here.