five force
In the past 30 years, Porter’s five forces model has been recognized as one of the most useful strategic management tools which can be used to analysis organization external environment, so as to help organization build up competitive advantages. However, with the development of the world, the five forces model has been challenged that it cannot be continued use to adapt today’s dynamic environment. This essay aims to challenge Porter’s five forces model and to identify the problems which hide behind in this model. Meanwhile, some feasible solutions to refine the strategic model will also be explored.
Some Linkedin participants believe that Porter’s five forces model is based on the ideal competition. It has also been criticized for viewing competition between suppliers and buyers as a zero sum game meaning only one can succeed in the expense of other players, which suggests an ongoing ‘war’ between stakeholders and other organizations. As Stefania(2013) points out, It thus ignores the value that other companies may bring through alliances and partnership. According to Thompson (et al 2013), corporations can gain benefits through strategic alliance and partnerships from the perspective of vertical integration, outsourcing and horizontal merges while minimizing the associated problems. For example, in 2008, Ferrero company became partner with South Africa local farmers, this move provided company with a new direction to grow as allying with raw material supplier not only guarantee the continuity of raw material supply, but also avoid the volatility of the raw material price (Thompson et al 2013). The ignorance of cooperation between companies would constrain the use of the five-forces model in practice.
As Kyle(2013) pointed out in Linkedin debate, the model is not completely universally applicable. Goold (1997, cited in Cafferky, 2005) has argued that the Porter five-forces framework for industry analysis is not applicable to nonprofit organisations. Thus
Some Linkedin participants believe that Porter’s five forces model is based on the ideal competition. It has also been criticized for viewing competition between suppliers and buyers as a zero sum game meaning only one can succeed in the expense of other players, which suggests an ongoing ‘war’ between stakeholders and other organizations. As Stefania(2013) points out, It thus ignores the value that other companies may bring through alliances and partnership. According to Thompson (et al 2013), corporations can gain benefits through strategic alliance and partnerships from the perspective of vertical integration, outsourcing and horizontal merges while minimizing the associated problems. For example, in 2008, Ferrero company became partner with South Africa local farmers, this move provided company with a new direction to grow as allying with raw material supplier not only guarantee the continuity of raw material supply, but also avoid the volatility of the raw material price (Thompson et al 2013). The ignorance of cooperation between companies would constrain the use of the five-forces model in practice.
As Kyle(2013) pointed out in Linkedin debate, the model is not completely universally applicable. Goold (1997, cited in Cafferky, 2005) has argued that the Porter five-forces framework for industry analysis is not applicable to nonprofit organisations. Thus