How Competitive Forces Shape Strategy

856 Words4 Pages
Michael E. Porter, associate professor published the article titled “How Competitive Forces shape Strategy” in Harvard Business Review in 1979. This article is retitled as “The Five Competitive Forces That Shape Strategy” and published in Harvard Business Review in 2008. Michael E. Porter developed the model of Five Competitive Forces which is defined as “Competitive Strategy – Techniques for Analyzing Industries and Competitors”. It has become a main device for analyzing an organizations structure in strategic practices. This article summarizes the key ideas and gives an overview of how this concepts works. Describes, how this five competitive forces shape every organization and every market. Summarizes how these forces will define the power of profitability, competitiveness, and attractiveness of the industry. Depending on the facts which is derived from the five forces analysis, the management of organizations will decide how to effect or abuse specific features of their industries. In general, mangers will look at the competition very closely. There are wide range of set of competitors which are discussed in this article. It is difficult for a company to make a profit on return on investment, if these forces are very powerful. If the forces are benevolent then the companies can gain profits. If some forces are stronger compared to other forces than that forces will control the profits of the industry. The five competitive forces that shape strategy are threat of
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