Annals of the University of Petroşani, Economics, 10(1), 2010, 289-298 289 THE MODEL OF THE FIVE COMPETITIVE FORCES ON ROMANIAN RETAIL MARKET SILVIA PUIU  ABSTRACT: The paper is about the model of the five competitive forces of Michael Porter. In the first part, I have presented the theoretical aspects of the model and after that, I tried to apply the model on the retail market in Romania. I used data gathered from national and international institutes of market research and also from the information offered by the main retailers on their web sites. The retail market in our country is not very good crystalized, but has had a good evolution in the last years. The competition is intense, the barriers are relatively high, the power of national supplyers is diminished by the integration of Romania in European Union, the power of consumers is moderate and the substitutes appear as discount stores and e-retailing. KEY WORDS: retail; Porter; Romania; competition; market JEL CLASSIFICATION: M19, M39 1. THE THEORETICAL BACKGROUND OF THE FIVE COMPETITIVE FORCES MODEL OF MICHAEL PORTER Michael Porter (1980) considers that rivalry (competition) on the market is result of the five variables or main forces: rivalry level, bargaining power of customers and that of suppliers, the threat of new entrants and of substitute products. These variables are interconnected. They are illustrated in the matrix of the five competitive forces of Porter (figure 1). Level of rivalry among existing firms characterize the intensity of competition in a particular industry to fill a specific market segment and is determined by factors such as number, diversity of competitors and the relative strength of them, the extent to which industry can be defined as young or mature ( growth prospects are limited in a mature industry, leading to increased competition among participants and  Assist. Prof., Ph.D. Student, University of Craiova, Romania, silviapuiu@yahoo.com