The Usefulness And Limitation Of Porter 's Five Forces Framework

1523 WordsDec 1, 20147 Pages
MSc Management: Formative Assignment Strategic management Tutorial Group: 5 Class Tutor: Hazel Nendick Name: Feng Zhao Student No: 1426710 The usefulness and limitation of Porter’s Five Forces Framework Introduction Porter’s five forces is a framework, which was developed by Michael Porter of Harvard Business School in 1979, was widely used in different industries for structural analysis and corporate strategy formulation (Wu, 2012). Porter’s five forces model is considered to be a basic idea to analyze the rules of competition in an industry and stress the important elements for the purpose of achieving a long-term competition attractiveness (Wu, 2012). The main purpose of this essay is to explain how Porter’s five forces framework for industry analysis determine the competition attractiveness of an industry through a case analysis: Fitness First Ltd and the UK health club industry and discuss the usefulness and limitation of Porter’s framework. Porter’s five forces of competition framework will be first briefly introduced. How to assess the strength of competition of the Fitness First Ltd using Porter’s five forces framework will be analyzed secondly. Finally, the usefulness and limitations of the framework in helping managers develop business
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