When analysing
the sectorial environment, we have to mention Michael Porter (Harvard
Business School). Porter believes that the level of intensity within
a sector and its profits are determined by the characteristics of
the sector.
The Model
of Porter's Five Forces tries to analyse and classify the factors
that effect a determined sector. It considers the profitability of
a sector (performance rate over invested capital) to be determined
by the five forces of competitive pressure.
In the
following graph, we can see Porter's five forces. External analysis
is a very important topic and we could write a whole course on it.
