1. Define the Industry – (i.e. Auto, Defense, Computer Software, etc.). Indicate some of the major competitors in the industry. It is essential that you initially define the industry you are analyzing before you proceed with the Five Competitive Forces analysis. If the industry is not adequately defined, or defined to broadly, it will become difficult to effectively apply the Five Forces Analysis. Consequently, please try to define your industry as narrowly as possible.
2. Analyze each of the Five Competitive Forces – Indicate if each Force is a significant or insignificant force within the industry. Make sure you justify your assessment with reasoned analysis. You should be able to specifically identify Buyers, Suppliers and possible Substitutes for each respective Force. Also specify and justify how difficult it would be for a new entrant to penetrate the industry (i.e. what are the barriers to entry into the industry) and factors impacting that Competitive Rivalry within the industry.
3. Summarize Your Analysis – Summarize the primary Force or Forces impacting the industry and articulate if you consider the industry attractive or unattractive for existing and new competitors. Indicate and justify if you consider this a profitable or unprofitable industry based on your analysis of each of the Five Competitive Forces. Also, reflect or speculate on the dynamics or how the industry is changing or expected to change in the future based on the Five Competitive Forces and how these changes may impact the nature of the industry in the future.