Porter's Five Forces

894 WordsDec 19, 20124 Pages
Porter’s Five Forces 1 In talking strategy for any company, Porter’s Five Forces Model is likely to come up. It has served as a strategic planning guideline for years. If a company is just starting out, they would have to analyze the model and apply it to themselves from every aspect. If a company is well established, the model can serve as points that need to constantly be revisited. In going global, the tool becomes invaluable. It still only serves as a guideline, but it delivers significant points that have to be examined in a different culture of diverse laws and governmental controls. The following paragraphs will describe Porter’s Five Forces Model, describe how it can assist in going global, and examine possible limitations…show more content…
Other new entrants may see these well known names as a threat to entry and should definitely be reason to focus on that aspect of the five forces model (Prasad 2011). As with any guideline model, Porter’s Five Forces Model has certain limitations as well. First, the model was created quite a time ago, and the dynamics of the economy have changed. When the model was created, the name of the game was profitability and survival. In today’s global climate, industries can be unpredictable. The model is best used in a simple economic structure. Companies that have many products, suppliers, and customers may not fit into all of the categories and risk factors presented by the five forces model. Lastly, technology being what it has become today, the forces model would be grueling to re-evaluate every time technological advances come through (Max-Adler 2012). In conclusion, Porter’s Five Forces Model has served management teams for a basis of strategic planning for years. Though the model may have some limitations, it has proven its effectiveness and validity over time. Used as a framework to evaluate the different business cultures when operating globally makes the model an invaluable tool. 4 References Max-Adler.net. 2012. Retrieved from http://www.max-adler.net/porters- five-forces-critical-review.html Porter’s Five Forces: A Model For Industry Analysis.

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