porters-five-forces

# Porter's Five Forces (Evidence-Cited)

## Purpose

Read an industry's structure through Porter's Five Forces, with evidence: **search plan →
force-by-force ratings with signals → profit-pool implication → next-step options.** Each force —
competitive rivalry, threat of new entrants, threat of substitutes, buyer power, supplier power — is
rated weak/moderate/strong and justified with documented signals, because a rating without signals is
vibes. The analysis closes where it should have been aiming all along: **where the profit pool sits
and who is squeezing it.** Five forces is an argument about where margin goes, not a diagram for
slide four.

## Input

**Works best with:** the industry or segment, named as precisely as you can ("clinical data
management SaaS," not "healthcare"), and **the decision this analysis should support**.
**Also useful:** a geographic boundary if the structure differs by region, and a
[`market-landscape-scan`](../market-landscape-scan/SKILL.md) in session — the forces read builds on
it and searches only gaps.

Input supplied inline with the invocation — text after the skill name, a pasted context dump, or an
appended `ARGUMENTS:` line — counts as answers already given. Use it against the question budget;
don't re-ask.

**Arriving empty-handed? That works too.** The skill opens with at most 3 questions (segment,
decision, boundary) and proceeds on labeled assumptions if they go unanswered.

**Example invocation:** `Five forces on mid-market field-service management software, North America —
decision: whether we enter or partner.`

## Key Concepts

- **Governing protocol:** honors the [`autonomous-investigation`](../autonomous-investigation/SKILL.md)
  contract — question budget of 3, search-plan gate, Fact/Inference/Assumption labels, Just Enough
  Mode (2-4 signals per force), stable schema, 4-option Final Step. Disciplines: FININT
  (concentration, margins, filings) + OSINT (analyst coverage, trade press) per
  [`intelligence-collection-disciplines`](../intelligence-collection-disciplines/SKILL.md).
- **The framework (Porter, 1979):** industry profitability is determined by five structural forces,
  not by how hard incumbents work. Rivalry sets the intensity of margin competition; entry threat
  caps pricing; substitutes cap value; buyer power extracts margin downstream; supplier power
  extracts it upstream. Structure explains what negotiation skill cannot: **pricing power is
  structural.**
- **Ratings must survive "how do you know?"** Each weak/moderate/strong rating stands on documented
  signals — concentration data, switching costs, entry examples and how they fared, substitute
  adoption curves, margin trends. Forces-with-signals is the difference between naming a framework
  and using one.
- **AI-driven substitution is a named candidate, always.** In most knowledge industries it is now
  *the* substitute threat; assess it explicitly in the substitutes force rather than letting the
  analysis pretend it's 2015. Supplier power gets the same modern read: cloud, model, and platform
  dependencies are supplier concentration.
- **Industry, not player:** this reads what the structure does to *everyone* who plays.
  [`swot-analysis`](../swot-analysis/SKILL.md) reads one company's position within it.
- **When NOT to use:** nascent categories with no stable structure — the forces are still forming;
  run the landscape scan and revisit.
- **Do-not-invent list:** market share, margin data, entrant names, funding rounds, adoption figures.

## Application

1. **Credit inline context**, then ask only the unanswered questions (max 3):
   1. Which industry or segment, precisely?
   2. What decision should this support?
   3. Any geographic boundary?
2. **Show the 3-bullet search plan** — what you'll search per force, source types (filings, analyst
   coverage, trade press, pricing pages, funding databases), fact/inference separation. Continue
   unless revised. If a landscape scan is in session, build on it; search only gaps.
3. **Rate each force with signals, then emit the schema below exactly.**

### Output schema (do not reorder)

~~~markdown
# Five Forces: [Industry / Segment]
**As-of date:** | **Boundary:** | **Decision supported:**

## 1. Competitive Rivalry — [weak / moderate / strong]
- Signals: [concentration, growth rate, differentiation, exit barriers — each with URL + label]
- What it means here: [one sentence]

## 2. Threat of New Entrants — [weak / moderate / strong]
- Signals: [entry barriers, capital needs, recent entrants and how they fared, regulation — each with URL + label]
- What it means here: [one sentence]

## 3. Threat of Substitutes — [weak / moderate / strong]
- Signals: [substitute adoption, price-performance trajectory, switching evidence — each with URL + label]
- AI-driven substitution, named and assessed: [labeled]
- What it means here: [one sentence]

## 4. Buyer Power — [weak / moderate / strong]
- Signals: [buyer concentration, switching costs, price transparency, backward-integration examples — URL + label]
- What it means here: [one sentence]

## 5. Supplier Power — [weak / moderate / strong]
- Signals: [supplier concentration (including cloud/model/platform dependencies), input differentiation — URL + label]
- What it means here: [one sentence]

## 6. The Profit Pool (the "so what")
- Where margin sits today, and the force squeezing it: [labeled]
- Structure trend: [tightening / loosening, on what evidence]
- For your decision: [2 sentences tying structure to the decision named above]

### Assumptions to Validate
- [Assumption 1] / [Assumption 2] / [Assumption 3]
~~~

A copy/paste fill-in version of this schema, with quality checks, lives in [`template.md`](template.md).

### Final Step (offer exactly 4 options)

1. Trace the strongest force into your strategy's exposed assumptions
2. Run [`market-landscape-scan`](../market-landscape-scan/SKILL.md) to name the players behind each force
3. Feed the profit-pool read into an Ansoff g