Outmoded Strategies in Business Essay

758 Words 4 Pages
Michael Porter believed that the traditional strategic analysis through the SWOT system was not a sufficient way to analyze business strategy, so he published his alternative, “How Competitive Forces Shape Strategy,” to replace the SWOT Analysis method in 1979. These competitive forces, although proficient in examining a business’s past, are not an effective way to create a strategy that drives a business into the future of its industry. The reason that Porter’s Monitor Group failed was because it did change with the rapidly changing marketplace we find ourselves in today. Monitor, like the Five Forces Strategy, lacked clairvoyance.
The Five Forces Porter used as the basis of his consulting firm included the bargaining power of customers, threat of new entrants, threat of substitute products, bargaining power of suppliers, and competitive rivalry within an industry. These forces, attempting to serve as a framework for industry analysis and strategic development, focus too heavily upon the existing industry and competitors, which is very important in business planning, however it is not the driving force that keeps a business a head of its competition.
Porter’s business plan was to secure your firms leading industry position by creating extremely high barriers and crunching the market data. Keeping your customers with little influence on prices, squashing the small and newer entrants, eliminating product or service alternatives, and by keeping your suppliers dependent…

More about Outmoded Strategies in Business Essay