Competitive Forces Analysis: What Porter Got Right and Marketers Still Miss

Competitive forces analysis is a structured method for mapping the pressures that shape profitability and strategic positioning in a market. It goes beyond listing rivals to examine the full system of forces that determine how hard a market is to win in and where the real margin pressure comes from.

Most marketers know Porter’s Five Forces exists. Fewer use it in a way that actually changes anything. This article is about closing that gap.

Why Competitive Forces Analysis Is Not the Same as Competitor Research

When most marketing teams talk about competitive intelligence, they mean tracking what their direct rivals are doing. New campaigns, pricing changes, product launches, social activity. That work has value, but it is a narrow slice of what competitive analysis should cover.

Competitive forces analysis, in the Porter sense, asks a different question. Not just “who are we competing against?” but “what are the structural forces in this market that determine how profitable it is and where the leverage sits?” That is a much more useful question for strategy.

I have sat in a lot of planning sessions where the competitive slide shows a grid of direct competitors, their price points, and a rough sense of their media spend. That is useful context. But it tells you almost nothing about the forces that will shape whether your category grows or contracts, whether margin pressure is coming from buyers or from new entrants, or whether the real threat to your business is a substitute that has not been named yet.

If you are building a marketing plan that needs to hold up commercially, the broader framework matters. The market research and competitive intelligence hub on this site covers the full stack of tools and approaches. This article focuses specifically on forces analysis and how to make it useful in practice.

The Five Forces: What Each One Actually Means for Marketers

Porter’s framework was designed for corporate strategy, not marketing specifically. But each of the five forces has direct implications for how you position, price, and allocate budget. Here is how each one translates.

Competitive Rivalry

This is the force most marketing teams are already tracking, even if informally. How many competitors are there? How similar are the products? How aggressively are rivals competing on price, media, or distribution?

High rivalry compresses margin and makes differentiation harder to sustain. If you are operating in a market where four or five players are all running broadly similar campaigns with similar propositions, the market is telling you something. Either you find a genuinely differentiated position, or you compete on efficiency. Both are valid strategies, but they require different budget allocations and different creative approaches.

When I was growing an agency from around 20 people to over 100, one of the clearest signals that a client was in a high-rivalry market was the brief itself. The ask was almost always “we need to outspend the competition” rather than “we need to find a position the competition cannot easily copy.” The former is a symptom of undifferentiated rivalry. The latter is the more interesting strategic problem.

Threat of New Entrants

How easy is it for a new player to enter your market? The answer depends on barriers: capital requirements, regulatory hurdles, brand loyalty, distribution access, and the cost of building credibility from scratch.

In digital markets, many of these barriers have dropped. A well-funded direct-to-consumer brand can now enter a category that previously required retail distribution relationships built over years. That changes the calculus for incumbents. The threat of new entrants is not just about who is entering now, it is about how easy the door is to open.

For marketers, this force shapes how much investment you put into brand equity versus performance. If your market has low entry barriers, brand is a moat. If entry barriers are high, you can afford to be more transactional. Neither is universally true, which is why the analysis matters.

Threat of Substitutes

This is the force that gets underestimated most consistently, in my experience. A substitute is not a direct competitor. It is a different product or service that meets the same underlying need.

The classic example is the newspaper industry failing to account for online classified advertising as a substitute for print classifieds. The threat did not come from another newspaper. It came from a different category entirely. By the time the substitution was obvious, it was largely irreversible.

I have seen this play out in digital advertising too. When I was working across performance marketing at scale, managing significant media budgets across multiple verticals, the clients most exposed were the ones who had built their entire acquisition model on a single channel. When a substitute for that channel emerged, whether that was a shift in platform algorithm, a new format, or a change in audience behaviour, the whole model was suddenly fragile. The forces analysis should have flagged that vulnerability earlier.

For marketers, the substitute question is: what else could your customer do instead of buying from your category? Not just from a competitor, but from a different category altogether. That answer shapes your messaging, your retention strategy, and your product positioning.

Buyer Power

Buyer power is the degree to which your customers can dictate terms, whether that is on price, service levels, or switching behaviour. In markets where buyers are few, large, and well-informed, they hold significant leverage. In fragmented consumer markets with high switching costs, power sits with the seller.

Digital has shifted buyer power significantly in most categories. Price comparison is trivial. Reviews are public. Switching costs have dropped. Buyers arrive at the purchase decision better informed than they were ten years ago. This has direct implications for how you structure your marketing. If buyer power is high, your messaging needs to work harder on value justification. Loyalty programmes matter more. Post-purchase experience matters more. The acquisition-only model breaks down.

Understanding engagement patterns across channels is part of reading buyer power correctly. Buffer’s analysis of Instagram engagement rates is a useful reference point for understanding how platform behaviour reflects audience control over attention, which is a form of buyer power in the media market.

Supplier Power

Supplier power is often the force marketing teams engage with least directly, but it matters more than it appears. In media terms, the platforms are suppliers. If Google and Meta control the majority of your paid acquisition, your suppliers have significant leverage over your cost base and your reach. That is not a comfortable position, and it is one worth naming explicitly in a forces analysis.

The same applies to technology vendors, data providers, and creative production partners. When supplier concentration is high, your ability to negotiate on price or switch providers is limited. That affects budget planning, contingency thinking, and how aggressively you should be building first-party capabilities.

How to Run a Forces Analysis That Produces Useful Output

The failure mode for most forces analyses is that they produce a slide with five boxes and a rating of high, medium, or low for each force, and then the deck moves on. That is not analysis. That is a framework with labels attached.

Useful forces analysis has three components: an honest assessment of each force, a view on direction of travel, and a set of implications for strategy.

The direction of travel question is important and often skipped. Is buyer power increasing or decreasing in your category? Is the threat of substitutes growing? Are entry barriers rising or falling? A static snapshot of the current state is less useful than understanding the trajectory. Markets are not fixed, and the forces that shape them shift over time.

The implications question is where the analysis earns its place in a marketing plan. For each force, the question should be: given this pressure, what does it mean for how we position, price, and communicate? If rivalry is intensifying, does that mean we need a sharper point of difference or a lower cost of acquisition? If buyer power is rising, does that mean we invest more in retention and lifetime value? If substitute threats are growing, does that mean we expand our category definition in messaging?

Building strategy around integrated research and intelligence, rather than isolated data points, is something the team at Moz has written about well. Their piece on creating integrated strategy from MozCon 2025 is worth reading if you are thinking about how competitive signals feed into a broader planning process.

Where Forces Analysis Fits in the Planning Cycle

Forces analysis is not a one-time exercise. It is most valuable when it is part of a regular planning rhythm, revisited at least annually and updated when significant market events occur.

The right place for it in the planning cycle is upstream of channel strategy and budget allocation. Before you decide how much to spend on paid search versus brand activity versus retention, you should have a view on the structural forces in your market. Those forces should inform where the leverage sits and where the risk is concentrated.

I have judged the Effie Awards, which are specifically about marketing effectiveness, and one thing that consistently distinguishes the strongest entries is that the strategy is grounded in a clear reading of the market context, not just the competitive set. The campaigns that win are usually the ones where the team understood something structural about the market that their competitors had missed or ignored. Forces analysis is one of the tools that surfaces those structural insights.

The challenge is getting the analysis done rigorously enough to be useful without it becoming a six-week research project that delays everything else. In practice, a focused forces analysis for a single market can be completed in a few days if the right people are in the room and the scope is kept tight. The goal is a clear enough picture to make better strategic decisions, not a definitive academic treatment of the market.

The Forces You Are Not Watching Closely Enough

If I had to pick the two forces that marketing teams consistently underweight, it would be substitutes and supplier power.

Substitutes are underweighted because they require you to think outside your category, which feels counterintuitive when your job is to win within it. But the most significant competitive threats in most industries have come from substitutes, not from direct rivals. The taxi industry was not disrupted by a better taxi company. Travel agencies were not disrupted by a better travel agent. The substitute threat is the one that tends to arrive without warning if you are not actively looking for it.

Supplier power is underweighted because marketing teams tend to treat platform relationships as a given rather than a structural risk. When I was managing significant paid media budgets across multiple clients, the dependency on a small number of platforms was always present but rarely named explicitly as a strategic vulnerability. It should be. If two platforms account for the majority of your paid acquisition, you have a supplier concentration problem that belongs in your forces analysis.

Forrester’s work on change management and organisational adaptation is relevant here because the real challenge in acting on forces analysis is often internal, not analytical. Their thinking on change management applies directly to the problem of getting organisations to act on structural intelligence that challenges existing assumptions about how the market works.

Competitive Forces Analysis and Positioning: The Direct Connection

The reason forces analysis matters for marketers specifically is that positioning decisions should be informed by structural market conditions, not just by what competitors are currently saying.

If rivalry is high and products are undifferentiated, the positioning challenge is to find a dimension of difference that competitors cannot easily copy. That might be a segment they are ignoring, a use case they are not addressing, or a channel they are underinvesting in. The forces analysis tells you the terrain. The positioning work tells you where to plant the flag.

If buyer power is high, the positioning challenge shifts toward justifying value rather than simply claiming it. Buyers who are well-informed and have easy access to alternatives are not persuaded by assertion. They need evidence. That changes the content strategy, the role of reviews and social proof, and the importance of post-purchase experience as a marketing asset.

If the threat of new entrants is rising, the positioning challenge is to build switching costs and brand loyalty before the new entrants arrive with fresh propositions and challenger budgets. That is a different investment profile from a market where entry barriers are high and incumbents are protected.

Early in my career, when I was still learning how commercial pressures shaped marketing decisions, I built a website from scratch because the budget for a proper build was not available. That experience taught me something useful: constraints force you to understand the fundamentals. Forces analysis is one of those fundamentals. It is not glamorous, but it shapes every downstream decision about where to focus effort and money.

Content strategy is also affected by forces. Copyblogger has written extensively about how competitive positioning in content requires genuine differentiation rather than incremental improvement on what already exists. Their piece on how one writer hijacked Copyblogger’s audience is a sharp illustration of how understanding the competitive landscape in content can surface genuine positioning opportunities. And their thinking on taking a clear point of view applies directly to the positioning challenge in high-rivalry markets.

Making the Output Actionable

The test of a good forces analysis is not the quality of the framework completion. It is whether the output changes any decisions.

The most common failure I have seen is a thorough analysis that sits in a strategy document and never surfaces again. The team does the work, presents the findings, and then the planning process proceeds as if the analysis had not happened. Budget allocations stay the same. Positioning stays the same. Channel mix stays the same. The forces analysis becomes a box-ticking exercise rather than a strategic input.

To avoid that, the output of a forces analysis should be translated into specific decisions or decision triggers. If the analysis shows that buyer power is rising, the decision might be to increase the retention budget by a specific percentage in the next planning cycle. If the substitute threat analysis surfaces a new category encroaching on your market, the decision might be to run a positioning test that explicitly addresses the comparison. If supplier concentration is identified as a risk, the decision might be to set a hard cap on the percentage of acquisition budget allocated to any single platform.

Decisions with owners and timelines. Not observations with no consequence.

There is a broader body of thinking on market research and competitive intelligence that underpins this kind of structured analysis. The market research hub on this site covers the full range of tools and frameworks, from customer research through to competitive positioning, if you want to go deeper on any of the adjacent areas.

About the Author

Keith Lacy is a marketing strategist and former agency CEO with 20+ years of experience across agency leadership, performance marketing, and commercial strategy. He writes The Marketing Juice to cut through the noise and share what works.

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