Porter's Five Forces

1036 Words Aug 4th, 2011 5 Pages
Assignment 1
Describe Porter’s Five–Force model and how it is helpful when developing one’s international strategy. Do you see any limitation to Porter’s modeling techniques?

Michael Porter 's Five-Force model, as described and illustrated in “Porter’s Five Forces: A Model for Industry Analysis (Article from QuickMBA.com)”, goes beyond the traditional industry competitive analysis that would just compare Rivals, both current and potential, to include Suppliers and Buyers and also Product or Service Substitutes. I have not yet read Porter’s “Competitive Strategy” (1980), but understand that it is the definitive work on the introduction of the Porter Five-Force model (1979) and describes how the model can be used as a tool to not only
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There also may be a timing and applicability challenge given that any of the five forces may change through time because of emergent factors which will require a revalidation of the strategy due to a change in one or more of the five forces.
Another limitation on the model may be that Porter’s perspective appears to be at the Industry level. Dr. Aktouf, in his article “The False Expectations of Michael Porter’s Strategic Management Framework: 04/11/2004” stated that Porter’s work is at the meso-economic level and that the type of business itself is “kind of a black box”. The model seems to emphasize and evaluate an industry holistically and not on the strengths and weaknesses of individual firms. He concludes that Porter’s model overemphasizes the importance of industry structure as a determinant of company performance and underemphasizes the importance of differences between companies within an industry. However, Dr. Aktouf also commends Porter for going beyond the existing models in 1979 such as the Boston Consulting Group’s portfolio model “based on an analysis of advantages and disadvantages which limited them to the microeconomic level”. His most serious objection to what is called the

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