What is the framework proposed by Michael Porter that identifies five forces determining a firm's profit potential?

The framework proposed by Michael Porter that identifies five forces determining a firm's profit potential is known as the Five Forces Model. This model analyzes the competitive environment within an industry and helps businesses understand the dynamics that can affect their profitability. The five forces identified in this model are the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitute products or services, and the intensity of competitive rivalry within the industry.

Understanding these forces allows firms to develop strategies that can enhance their competitive position and maximize profitability. For instance, identifying high rivalry in an industry may lead a firm to innovate or differentiate its products to maintain a competitive edge. The model is widely used in strategic management to assess industry attractiveness and to guide decision-making in business strategy.

While other frameworks listed, such as SWOT Analysis, Competitive Advantage Framework, and Value Chain Analysis, are valuable tools for strategic management, they serve different purposes. SWOT Analysis focuses on internal strengths and weaknesses as well as external opportunities and threats. Competitive Advantage Framework deals with how firms can achieve and sustain competitive advantages. The Value Chain Analysis examines the activities within an organization that create value for customers. Each of these frameworks offers unique insights, but none specifically identify the five forces affecting profit potential like Porter's