Nike, Inc.
Significance of Five force analysis
Porter’s five forces of competition framework view the profitability of an industry as determined by the five forces of competitive pressure. It is a simple but powerful tool for understanding where power lies in a business situation. It helps a firm in understanding its current strength in the industry. It also brings into light the strengths of the competitors. With a clear understanding of where power lies, a firm can take reasonable advantage of a situation of strength, improve a situation of weakness, grab the opportunities and keep away from taking wrong steps. This makes it an important part of planning a strategy for any firm in any industry. At the same time, the tool helps in identifying whether new products, services have any future prospect and the potential to be profitable.