The Five Forces

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Michael E. Porter — Strategic Framework

The Five Forces

A side-by-side comparison of the original 1979 framework and Porter's own 2008 update — what changed, what didn't, and why it matters.

1979 — HBR Vol 57, No. 2 2008 — HBR Vol 86, No. 1

The five forces — unchanged across both versions

01

Threat of New Entrants

Horizontal

02

Bargaining Power of Suppliers

Vertical

03

Bargaining Power of Buyers

Vertical

04

Threat of Substitutes

Horizontal

05

Rivalry Among Existing Competitors

Central force

Version comparison

1979

How Competitive Forces Shape Strategy

Harvard Business Review, Vol 57 No. 2, pp. 137–145

• Introduced the five forces as the fundamental drivers of industry competition and profitability
• Focused on identifying and describing each force — largely diagnostic in nature
• Barriers to entry described broadly: economies of scale, brand identity, distribution access, government policy
• Government treated as external context, not explored in depth
• No discussion of complements or complementary products
• No explicit section on how to apply the framework in practice
• Implied a static, point-in-time snapshot of industry structure
• Technology and innovation not specifically addressed

2008

The Five Competitive Forces That Shape Strategy

Harvard Business Review, Vol 86 No. 1, pp. 78–93

• Reaffirmed all five original forces — no forces added or removed
• Added substantial practical guidance: positioning, exploiting change, shaping industry structure
• Expanded barriers to entry into 7 codified sources including network effects and switching costs
• Government explicitly clarified as a factor influencing the five forces, not a standalone 6th force
• Complements addressed directly — rejected as a 6th force, classified as a factor affecting existing forces
• Innovation and technology acknowledged as factors, not separate forces
• Emphasized industry structure is dynamic and evolves over time
• Responded to 30 years of academic criticism and application challenges

Key differences

Dimension

1979 Original

2008 Update

Barriers to Entry Expanded

Broad list: scale, brand, distribution, government

Codified into 7 specific sources — added network effects, switching costs, capital requirements, incumbency advantages

Complements New

Not mentioned

Addressed directly — rejected as a 6th force. Complements are a factor influencing the existing five forces

Government Clarified

Mentioned as external context

Explicitly defined as a factor affecting the strength of forces — not a standalone force

Innovation Clarified

Not specifically addressed

Responded to tech-industry critics — innovation is a factor influencing forces, not a separate force

Application New

Diagnostic only — "here are the forces"

Added sections on positioning, exploiting industry change, shaping structure, expanding the profit pool

Industry Dynamics Expanded

Implied a static point-in-time snapshot

Emphasized that industry structure evolves — forces shift and companies can influence them

Deep dive — Barriers to entry, 2008 codified sources

7 Sources of Entry Barriers

The 2008 update formalized these into a definitive list. Items marked "new" were not in the 1979 version.

01Supply-side economies of scale

02Demand-side benefits of scale (network effects) New

03Customer switching costs New

04Capital requirements

05Incumbency advantages independent of size New

06Unequal access to distribution channels

07Restrictive government policy

Bottom line

The five forces themselves did not change between 1979 and 2008. Porter's update was a reaffirmation and extension — not a revision. He added depth, practical tools, and responses to 30 years of criticism, while explicitly rejecting proposals for a 6th force.