Awareness of the five forces can help a company understand the structure of its industry and stake out a position that is more profitable and less vulnerable to attack.
IN ESSENCE, the job of the strategist is to under- stand and cope with competition. Often, however, managers define competition too narrowly, as if it occurred only among todays direct competi- tors. Yet competition for profits goes beyond es- tablished industry rivals to include four other competitive forces as well: customers, suppliers, potential entrants, and substitute products. The extended rivalry that results from all five forces defines an industrys structure and shapes the nature of competitive interaction within an industry.
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