Competitive And Five Forces Mapping

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