What a Five Forces Diagram Looks Like

When I see someone draw a Five Forces diagram that flows like a story—where each force connects logically to the central industry and the whole structure feels balanced—I know they’ve moved beyond memorization into real understanding.

That moment of clarity isn’t magic. It comes from learning how the pieces fit together, not just how to draw them.

Over the years, I’ve reviewed hundreds of diagrams, from sharp students to seasoned analysts. The ones that stand out aren’t the most colorful or detailed. They’re the ones where the layout makes the logic visible.

This chapter teaches you exactly how to structure your diagram so it communicates clearly, even to someone unfamiliar with Porter’s model.

You’ll learn why the standard five forces chart layout works, how to draw Porter’s model with confidence, and how to avoid common visual missteps that undermine your analysis.

The Standard Layout: Why It Works

The classic five forces diagram isn’t arbitrary. It’s designed to mirror how competition unfolds in real markets.

Think of it as a map. The central box—the industry—represents the target market. Around it, the five forces radiate outward like spokes on a wheel, each one pulling from a different direction.

This structure reflects that competition doesn’t come from one source. It’s a web of pressures—some from inside, some from outside—shaping profitability.

Here’s how the forces are traditionally arranged:

• Threat of New Entrants – Placed at the top
• Bargaining Power of Suppliers – Left side
• Bargaining Power of Buyers – Right side
• Threat of Substitutes – Bottom left
• Rivalry Among Competitors – Bottom right

This layout isn’t just convention. It reflects the competitive reality: new entrants and substitute products act as external shocks; buyers and suppliers exert pressure from the sides; and existing competitors battle head-on in the center.

Visualizing the Flow: A Step-by-Step Guide

Begin with a single rectangle in the center. Label it “Industry” or “Market.” This is the core of your analysis.

Then, draw five arrows or lines extending from the center, pointing toward each force. Each line connects to a label, and the label is placed slightly outside its respective side.

Use consistent line styles—solid, straight, and angled slightly outward to avoid clutter. This keeps the diagram clean and easy to read.

The goal is clarity, not decoration. A well-drawn five forces diagram should be understandable at a glance.

Why This Order Matters

While you can rearrange the forces, the standard order has stood the test of time because it groups related forces together.

For example, suppliers and buyers are both external parties with power over pricing. Placing them on opposite sides shows how their influence counters each other.

New entrants and substitutes are both “external threats.” Placing them at the top and bottom helps visualize how they can disrupt existing structures.

And rivalry—being internal and intense—belongs at the center, where competition is most direct.

Sample Diagram: The Coffee Shop Example

Here’s how a clean five forces chart layout looks when applied to a local coffee shop:

At the center: “Local Coffee Shop Market”

Top (new entrants): “Low barriers—easy to open a café, but brand loyalty limits growth.”

Left (suppliers): “Large roaster chains dominate—limited choice, strong control over prices.”

Right (buyers): “Many small buyers—price-sensitive, but loyalty programs reduce power.”

Bottom left (substitutes): “Tea shops, energy drinks, home brewing—substitutes are strong.”

Bottom right (rivalry): “High—multiple chains, same products, same locations, constant price wars.”

This layout immediately conveys that while entry is open, the real danger comes from rivals and substitutes. Suppliers still hold some power, but buyers are less so.

This is what a five forces chart layout should do: tell a story at a glance.

Common Mistakes to Avoid

When I review first-time diagrams, I often find the same errors:

• Forces placed randomly, with no logical flow.
• Arrows pointing inward without labels.
• Overcrowding the center with text.
• Using different line styles or inconsistent spacing.

Remember: your goal isn’t to fill space. It’s to communicate.

Keep labels short. Use consistent fonts. Leave space between forces so the eye can move freely.

Overly complex diagrams often mean the thinker is still sorting ideas. Let the structure guide the clarity.

How to Draw Porter’s Model: A Simple Checklist

Follow this step-by-step checklist when you draw Porter’s model:

1. Start with a centered box. Write “Industry” or “Market.”
2. Draw a line from the top center of the box outward. Place “Threat of New Entrants” above it.
3. Draw a line from the left center of the box outward. Place “Bargaining Power of Suppliers.”
4. Draw a line from the right center of the box outward. Place “Bargaining Power of Buyers.”
5. Draw a line from the bottom-left corner of the box outward. Place “Threat of Substitutes.”
6. Draw a line from the bottom-right corner of the box outward. Place “Rivalry Among Competitors.”
7. Keep lines straight and evenly spaced. Use consistent arrowheads.
8. Add brief, one-sentence notes to each force to show your reasoning.

Done correctly, your diagram becomes more than a template. It becomes your first visual argument.

Pro Tip: Use Icons to Build Visual Clarity

For classroom use or presentations, add small icons to each force:

• 🔥 for “Threat of New Entrants” (symbolizing disruption)
• 📦 for “Suppliers” (supply chain)
• 🛒 for “Buyers” (shopping)
• 🔄 for “Substitutes” (alternatives)
• ⚔️ for “Rivalry” (competition)

These icons don’t replace written explanation—they enhance it. They help the eye track faster, especially in group settings.

Don’t overdo it. One icon per force is enough.

When to Use a Five Forces Diagram

Not every analysis needs a diagram. Use one when:

• You’re presenting to a team or class.
• You’re preparing a report or assignment.
• You want to communicate your analysis quickly.
• You’re teaching someone else how to think strategically.

The diagram becomes a shared reference point—something everyone can point to when discussing risk, opportunity, or strategy.

It’s not just about showing your work. It’s about making your thinking visible and repeatable.

Frequently Asked Questions

What is the best layout for a five forces chart?

The standard layout—new entrants at the top, suppliers and buyers on the left and right, substitutes and rivalry at the bottom—aligns with how competition unfolds. It’s intuitive, widely accepted, and easy to explain.

Can I rearrange the forces in my diagram?

Yes, but only if you have a strong reason. The standard layout groups related forces and reflects real market dynamics. Rearranging them without justification may confuse readers. If you must change the order, include a note on why.

How do I draw Porter’s model by hand?

Start with a rectangle in the middle. Draw five straight lines from each side: top, left, right, bottom-left, bottom-right. Add labels, then write brief notes under each force. Use a ruler for clean lines.

Should I include examples in the diagram?

Not in the diagram itself. Keep the structure clean. Use a separate column or footer for examples. The diagram should convey the framework, not the case study.

Do I need color in the five forces diagram?

No, color is not required. But it can help highlight high-risk forces. Use color sparingly—e.g., red for high threat, green for low. Avoid over-designing. The analysis must still stand on its own.

How long should a five forces diagram take to draw?

A clear, well-labeled diagram should take 8–12 minutes to sketch by hand. If you’re spending more than 15 minutes, you may be focusing on aesthetics instead of substance. Prioritize clarity over perfection.

Mastering the five forces diagram basics isn’t about art—it’s about accuracy, logic, and communication. When you draw Porter’s model with intention, you’re not just sketching lines. You’re mapping a market’s true competitive landscape.

And that’s where real strategy begins.