Competitive And Five Forces Mapping

---
name: competitive-and-five-forces-mapping
description: "Maps an industry's competitive dynamics using Porter's Five Forces — rivalry, threat of new entrants, substitutes, supplier power, buyer power — to explain why the industry is structurally attractive or not, not just who the named competitors are. Use when assessing whether a market or industry segment is worth entering, defending, or exiting."
---

# Competitive & Five Forces Mapping

## Purpose

Maps the competitive dynamics and structural forces of an industry — not to
produce a one-off list of named competitors, but to explain *why* an
industry is structurally attractive or unattractive, and where the levers
for shifting that structure actually are.

## Anchored in research

- Porter, M. E. (1979), "How Competitive Forces Shape Strategy," *Harvard
  Business Review* (later formalized in *Competitive Strategy*, 1980) — the
  Five Forces framework: the intensity of competitive rivalry, the threat of
  new entrants, the threat of substitute products/services, the bargaining
  power of suppliers, and the bargaining power of buyers. Industry
  profitability is a function of the combined strength of these five forces,
  not just of head-to-head rivalry.

## Method

1. **Define the industry boundary.** Five Forces analysis is only as good as
   the boundary you draw around "the industry" — too broad a definition
   dilutes every force into vagueness, too narrow a one hides the real
   substitutes and adjacent entrants. State explicitly what's inside the
   boundary and what's treated as a neighboring industry.
2. **Assess rivalry among existing competitors.** Number and relative size of
   competitors, industry growth rate (slow growth intensifies rivalry over a
   fixed pool of demand), degree of product differentiation, exit barriers,
   and fixed-cost intensity (high fixed costs push players toward price
   competition to fill capacity).
3. **Assess the threat of new entrants.** Identify the actual barriers to
   entry — economies of scale, capital requirements, access to distribution,
   switching costs, regulatory/licensing barriers, brand loyalty — and rate
   each as strong, moderate, or weak. A low-barrier industry structurally
   caps long-run profitability regardless of how well any single player
   executes.
4. **Assess the threat of substitutes.** Substitutes aren't just direct
   competitors' alternative products — they're anything that satisfies the
   same underlying customer need through a different mechanism. Rate the
   substitute's price-performance trade-off and the customer's switching
   cost to it.
5. **Assess supplier bargaining power.** Concentration of suppliers relative
   to buyers, availability of substitute inputs, switching costs to another
   supplier, and whether suppliers could plausibly integrate forward into
   the industry themselves.
6. **Assess buyer bargaining power.** Buyer concentration and purchase
   volume, price sensitivity, availability of alternative suppliers,
   switching costs, and whether buyers could plausibly integrate backward.
7. **Synthesize into an overall industry-attractiveness read**, and — this is
   the step generic Five Forces write-ups usually skip — identify which one
   or two forces are actually the binding constraint on profitability here.
   Not all five forces matter equally in every industry; naming the one or
   two that dominate is what turns the framework into a decision input
   rather than a checklist exercise.
8. **Translate the binding constraint into an opportunity read.** Where a
   force is currently weak for incumbents (e.g. low switching costs, a
   fragmented supplier base), that's often exactly where a new entrant or
   new business model has room to establish a position — feed this forward
   into `../opportunity-value-assessment/SKILL.md`.

## What this skill does NOT do

- Doesn't make the final decision for you — it produces a structured draft
  to support a human decision.
- Doesn't confirm figures, market data, or competitor data from memory — it
  uses the inputs you provide, or clearly flags an assumption
  (`[assumption — verify]`).
- Doesn't replace a competitive analyst's up-to-date field intelligence — it
  structures the competitive landscape, it doesn't refresh it automatically.
- Doesn't treat all five forces as equally decisive by default — the point
  of the analysis is to identify which force(s) actually bind in this
  specific industry, not to score all five uniformly.

## Refinement notes

Areas to keep deepening with real practice:

- your own rules of thumb and heuristics for this technique
- concrete templates (into `../../references/`)
- reference cases / your own examples
- what this skill deliberately does *not* do (guardrails, common mistakes) —
  add to the list above

Once this section is filled in and validated in practice, update the
`maturity` field in `skills_index.json` to `draft`, `validated`, or
`canonical` (see `../../../meta/maturity_levels.md`). **Don't add new fields
to the frontmatter** — `name` and `description` are the only ones allowed
(see `../../../meta/frontmatter_schema.md`).

## Continue from here

- Once this stage is done, move to `../../../business-case-and-analysis/skills/requirements-and-scope-framing/SKILL.md`
- A ready-made skill chain for this situation: see `../../../playbooks/`
- This pack's shared guardrails: `../../CLAUDE.md`

## References

- `../../references/` — the pack's shared background material
- `../../CLAUDE.md` — this pack's shared guardrails