Porter Model

⏱ 4 min  ·  📅 2026

Porter's Five Forces Model is a strategic analysis framework developed by Michael Porter (Harvard Business School, 1979) to assess the level of competitiveness in an industry and the forces that determine a company's potential profitability within it. In the context of agile Design Thinking, it enriches the empathy and problem-definition phase with a perspective on the competitive environment.

The five forces

• Rivalry among existing competitors: intensity of current competition in the industry.
• Threat of new entrants: how easily new competitors can enter the market.
• Bargaining power of suppliers: suppliers' ability to impose terms.
• Bargaining power of customers: buyers' ability to influence prices and terms.
• Threat of substitute products: likelihood that customers will choose alternatives other than the current product.

Purpose and relationship with Design Thinking

Applied in agile product design contexts, the Porter Model helps to:

• Define the problem by considering the real competitive environment, not just user needs.
• Identify the differentiation opportunities that the 5 forces reveal.
• Connect the product team's work with the business strategy.

Practical application

Step 1: Identify the relevant forces

Identify which forces are most decisive for the industry being analyzed. Not all forces carry the same weight in every context.

Step 2: Extract insights for design

Turn the forces analysis into design questions: What does the user expect that our competitors do not offer? What barriers to entry can we leverage?

Step 3: generate ideas aligned with the competitive environment

Use the insights from the analysis as a stimulus in the ideation phase to generate differentiated solutions.

Step 4: Prototype and test

Build prototypes that validate both user hypotheses and strategic hypotheses.

Step 5: Iterate based on the market

Review the forces analysis periodically, especially when the competitive environment changes.

Common mistake

Doing the Porter analysis only once at the start of the project. The five forces change: new competitors enter, the bargaining power of customers evolves, and substitute products appear. A Porter analysis that is done once and never revisited can lead the team to make strategic decisions based on an environment that no longer exists.

Resources

🔧 Porter ModelTool · Scrum Manager

🏦 Skill Design ThinkingState of the art and development guide · Skill Arena

🏦 Skill Agile InceptionState of the art and development guide · Skill Arena

References

• Porter, Michael E. (1979). "How Competitive Forces Shape Strategy". Harvard Business Review.

See also

Design Thinking Inception Agile inception deck Product vision Minimum viable product

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