Identify and explain Porter's Five Forces model.

Porter identified five competitive forces that all corporations face and argued that understanding each of these five forces was key to successful strategic decisions. Understanding the five forces will determine the level of competitive rivalry in the business environment and enable allow companies to best exploit their core competencies to outperform the competition. The five forces are:
1.   Threat of existing competitors. Is the environment highly competitive? This tends to lower revenues.
2.   Threat of potential new entrants. Are there technological or investment barriers to entry? Are profits sufficiently high to attract new entrants? Low barriers to entry tend to lower revenues.
3.   Threat of substitute products. Availability of substitute products increases the competitive environment and lower revenue.
4.   Bargaining power of customers. Do customers have monopoly power? Can they successfully negotiate lower prices?
5.   Bargaining power of suppliers. In monopoly or oligopoly environments the suppliers have high power. These environments tend to increase the cost of supplies.