The Impact of Porter’s Five Forces Model on SMEs Performance: A Systematic Review

Small and medium-sized enterprises (SMEs) are vital to economic growth, yet they face considerable competitive pressures. This systematic review evaluates the impact of Porter’s Five Forces on SME performance to provide actionable strategic insights for business sustainability using qualitative and quantitative methods. A thorough search of Scopus, Web of Science, and Google Scholar was conducted, focusing on literature published between 2014 and 2024. Search terms included "Porter’s Five Forces," "SME competitiveness," and "competitive advantage." Studies were selected based on predefined inclusion and exclusion criteria, resulting in 51 out of 126 initial studies meeting the inclusion standards. Prominently, industry rivalry and customer bargaining power were found to be the most influential forces, particularly in competitive sectors such as retail and telecommunications, where differentiation and cost leadership play crucial roles. The review concludes that strategically managing Porter’s Five Forces can significantly enhance SMEs' competitive advantage and sustainability. SMEs leveraging differentiation and innovation are better equipped to address rivalry and buyer power. In industries such as manufacturing and healthcare, managing supplier power is critical for cost control and quality. Moreover, sectors like renewable energy can capitalize on the low threat of substitutes by fostering innovation. Future research should focus on specific sectors such as technology, retail, and tourism to develop tailored strategies that help SMEs navigate unique competitive pressures more effectively.