Whilst Porter was propelled to fame on the back of this and other intellectual advances, it seems an odd, if not disappointing, phenomenon that this original breakthrough has had somewhat little currency amongst practicing managers. Why is this the case?
Today, and well over 20 years since Porter’s original, major publication, there is still rela- tively little real awareness amongst main- stream managers, both at senior and middle levels of Porter’s original concept. If one were to take a sample based on attendees at strate- gic management courses at a particular busi- ness school, for example, it could be estimated that between 15% and 20% were familiar with these early Porter concepts and perhaps only 5% had actively used this at an explicit, ana- lytical level. Interestingly, if this is compared with the awareness level of basic SWOT analy- sis, a crude estimate is of 90–95% awareness and at least 50% active use. Whilst Porter was propelled to fame on the back of this and other intellectual advances, it seems an odd, if not disappointing, phenomenon that this orig- inal breakthrough has had somewhat little cur- rency amongst practising managers. Why is this the case? Some possible reasons for this are that:
� Porter’s framework is relatively abstract and highly analytical.
� Whilst Porter’s original framework explained the criteria for assessing each of the five competitive forces, he did so in the language of micro-economic theory, rather than in terms of its practicalities.
� His model was highly prescriptive and somewhat rigid, leaving managers, and indeed teachers in business schools, gener- ally inhibited from being playful, flexible and innovative in how they applied this powerful framework.
� Whilst the framework does help to simplify micro economics, its visual structure is rel- atively difficult to assimilate and its logic is somewhat implicit. Managers tend to like analytical concepts spelt out in very simple terms, otherwise they find it difficult to adapt to their default, fluid strategic man- agement style [sometimes characterized as ‘logical incrementalism’ (Quinn, 1980) or as ‘emergent strategy’ (Mintzberg, 1994)].
In this paper, it is argued that Porter’s five com- petitive forces model is a vitally important
concept and one that certainly merits the attention of all practising senior managers. It is also argued that to operationalize it more effectively requires significant further devel- opment. This is demonstrated with a practical example taken from the health club market, which has grown significantly in many coun- tries over the past 10 years, but has been heavily impacted by shifts in competitive pres- sure. However, it is first necessary to examine how Porter’s model could be developed further by studying the existing literature to see to what extent it has been developed, if at all.
The literature — has it moved on?
Academics do not seem to have been minded to explore and expand Porter’s framework, with very few attempts to develop Porter’s model having been made. Whilst there are ref- erences to Porter’s model in many research papers, the principal contribution of this paper is to expand Porter’s model into a far richer system of analysis, which managers can then operationalize and subsequent changes in their practices can then be studied in future research.