Hands-On Practice: Understanding Each Force

Have you ever looked at a business and wondered why some companies thrive while others struggle—even in the same industry? The answer often lies not in luck, but in how well they understand the forces shaping competition. Too many beginners jump into strategy without first grounding themselves in the real mechanics of rivalry, supplier power, buyer influence, and the threat of new entrants and substitutes.

This section is your foundation. It’s designed not just to teach you the Five Forces, but to help you apply them through targeted, step-by-step exercises. Each activity is built for real-world relevance—using everyday examples from cafés to streaming services—so you can move from theory to practice with confidence. Think of it as your personal strategy lab.

By working through these beginner business exercises, you’ll begin to see markets not as static environments, but as dynamic arenas shaped by measurable forces. You’ll also gain the ability to spot competitive threats before they emerge—giving you an edge in any business or academic setting.

What This Section Covers

• Exercise 1: Finding Competitors Around You – Use a guided worksheet to identify direct and indirect competitors in your local market. This exercise helps you recognize the scope and intensity of competitive rivalry through tangible examples.
• Exercise 2: Supplier Power — Who Do You Depend On? – Map out your key suppliers and assess how much control they hold. Learn how supply chain dependencies can shift power and impact profitability.
• Exercise 3: Buyer Power — Understanding Customers – Explore how customer loyalty, choice, and bargaining behavior shape pricing power. Use relatable scenarios to see how buyer behavior drives strategy.
• Exercise 4: New Entrants — How Easy Is It to Join the Game? – Investigate barriers to entry such as capital needs, regulations, and brand loyalty. This helps you evaluate how vulnerable a market is to disruption.
• Exercise 5: Substitutes — Spotting Alternatives in Everyday Life – Discover how alternative solutions meet the same customer needs. This sharpens your strategic thinking and helps anticipate unseen competition.
• Checkpoint: Creating Your First Simple Five Forces Table – Pull everything together into one clear summary. This serves as your first real competitive analysis chart, perfect for exams, reports, or personal review.

By the end, you should be able to:

• Identify and analyze competitive rivalry using real-world examples
• Assess supplier power by mapping reliance and negotiating leverage
• Evaluate buyer power based on customer behavior and market options
• Recognize barriers to entry and judge how easy it is for new players to enter a market
• Identify substitute products or services that threaten current offerings
• Construct a clear, beginner-friendly Five Forces table to summarize competitive dynamics

These Porter’s Five Forces exercises are not just about memorizing steps—they’re about building habits of strategic thinking. Each one is a chance to practice the kind of analysis professionals use, but with simplicity and clarity. You’ll complete a strategy workbook activity for each force, making it easier to retain and apply later.

Use a notebook, sticky notes, or a simple table to take notes—there’s no need for complex tools. The goal is clarity, not complexity. The more you engage with these beginner business exercises, the more naturally you’ll begin to see competition not as chaos, but as a system you can understand and navigate.