Five forces to help investors avoid struggling industries

In 1979, Harvard Business Review published a paper by economist and associate professor Michael E. Porter entitled ‘How Competitive Forces Shape Strategy'. Porter's ‘Five Forces' framework is a simple but powerful tool for understanding the competitiveness of a business environment and for identifying a strategy's potential profitability. Porter recognised companies often keep a close eye on their established rivals but encouraged them to look beyond the actions of their competitors and examine other factors. In all, Porter identified five forces that make up the competitive environme...