The most prevalent tool for analyzing a firm’s competitive advantage is Porter’s Five Forces Model. It is a powerful tool to evaluate the following:

Risk of entry by potential competitors

Bargaining power of buyers

Threat of substitutes

Bargaining power of suppliers.

The result of examining those factors provides an approximation of the fifth factor, the intensity of rivalry among established firms, as well as the type and nature of that competition.

Using Pella Window Corporation: In this post, identify the firm that you have selected, and provide a brief outline of the firm.

For that firm, select the most important factor affecting them in each of the 4 elements above. That is, for number 1, you would identify the potential competitor. For number 2, you would note the how buyers may have bargaining power over the firm, etc.