Porter's Five Forces
Assess industry attractiveness with Porter's Five Forces. Connect rivalry, entry, substitutes and bargaining power to margins and strategy.
Use the idea inside a branch. Never say the name.
- Rivalry among current players
- New entrants
- Substitutes
- Buyers' power
- Suppliers' power
Watch out: Name the one or two forces that matter here instead of weighing all five equally.
On a case
Is quick commerce in India an attractive business?
- Rivalry: several funded apps discounting
- New entrants: dark stores need heavy capital
- Substitutes: kirana stores deliver too
- Buyers: switch apps at no cost
- Suppliers: large brands set terms
Illustrative case. Figures and conditions below are assumptions for practice, not market data.
Treat the quick-commerce facts in the diagram as case assumptions, not a claim about today's market. Rival discounts pressure the selling margin. Buyer switching makes those discounts difficult to remove. Kirana delivery is a substitute because it can satisfy the same shopping need differently.
Supplier power depends on brand concentration and alternatives. Entry barriers depend on capital, local density and execution, not simply whether another app can be built. Ask how each force affects price, acquisition cost, supplier terms or fulfilment cost.
Assume an order contributes Rs 25 before a Rs 30 promotional discount: the discounted order loses Rs 5 before fixed costs. A defensible recommendation needs evidence that repeat orders, better density or stronger terms reverse that loss. Market growth alone does not establish attractive margins.
Sources and further reading
- Harvard Business School: the Five Forces
Porter's framework explains how industry structure influences competition and profitability.