ABSTRACT
This chapter contains five forces acting against a firm; the principles on which they are based; underlying assumptions; guidance on application, and relevant issues; and related models. The five forces are potential entrants, buyers, substitutes, suppliers, and industry competitors. The five forces can act continuously and adversely against the firm unless it defends itself or influences them in its favour. The effect of the five forces upon organizations may vary depending on the strength of the firm, the nature of the sector and the product. Buyers are the customers of firms products. Suppliers provide raw materials and other resources. The influence of buyers' groups is greater if buyers decide to manufacture their own supplies and thereby replace the supplier. Buyers may try to force down prices whilst requiring better quality or service and may play off competitors against one another.
