In this paper, the main goal was to analyze theoretically and empirically which competitive forces threaten the operation of the enterprise and the impact of these forces. The internal, external, general, business environment and all associated components were theoretically analyzed. Also, methods and techniques of these environments have been theoretically addressed. Porter's five competitive model includes: • Rivalry between existing competitors • Bargaining power of customers • Supplier bargaining power • The threat of new entrants • Threat of substitution products The five competitive forces model was addressed theoretically and empirically as the aim of the paper was to confirm the hypothesis and its supporting hypotheses. In order to assist the empirical part of the paper, a questionnaire was created and sent to large and medium-sized enterprices in Republic of Croatia, and 87 responeses were collected, which is an excellent sample for the thesis. Empirical research has shown that there is an association between competitive strength and firm performance, but this is not alwasy statistically significant, so the hypotheses are partially accepted. Businesses have to face even more competitive forces, as these five competitive forces strongly influence business performance, especially in today's dynamic business world. This paper has fulfilled its purpose and can serve as a good basis for further research into the competitive forces and performance of enterprises.