Porter's Five Forces Model Of A Company And Industry

Business: A company or organization comprises of product development, marketing and R&D for the goods. A business can be profitable or non-profitable.
Industry: Industry is a group of organizations or companies in the same field where the offering of goods are closely related.
For example: BestBuy, Staples etc. constitute an industry offering the same goods or services.
Sector: Sector is referred to a specific type of product which could be related to food or gas for an example.
So a group of Industries with respect to a particular and similar products is called Sector.
A simple illustration below
Producing/Buying + Selling goods/services = Business
Business company 1 + Business company 2 = Industry
Industry + Industry (specific to particular

There are many models in the market which help the companies in taking the appropriate decision based on the analysis. One of them is the Porter’s model which provide guidance in many ways no matter if a company is new to the market or well established, which helps in keeping track of all the factors to help in running the organization into profits.
Porters Five Forces Model is a good approach towards any organization which is having a superior performance towards its goals and missions.
This model constitutes of “Risk of Entry”, “Bargaining Power of Buyers”, “Bargaining Power of Suppliers”, “Threat of Substitutes” and "Rivalry among established firms in the Industry". In the strategic decision making, to meet our goals we will try to globalize our company, work on external analysis, internal analysis and the threats.
For this to happen, the rules in the Porters Model will help us analyze what are the effecting factors for us, to establish our company and increase its sales without creating the rivalry with other companies and foresee what are the substitutes which are coming into the market without

Threat of Substitute: In a business like café shop, we should always anticipate more people coming into the business and we should ensure the quality and taste in providing competition which will make us stand out in the market.
Risk of new entrant’s: This would impact more on us as there are always more and more people coming in our way, to avoid this we should make sure to have strong barriers for others to enter. Being in the field will obviously favor us in giving tough competition for new entrants, to even avoid that we should invent new techniques, marketing strategies and varieties depending on customer feedback. Like Starbucks provides free Wi-Fi to their customers and process their orders in a very fast