Management

Mapping competitive forces: horizontally and vertically Porter’s Competitive Strategy (1980) focused principally on analysis at the industry level. However, this could be inappropriate, partic- ularly as the competitive landscape for a busi- ness might be of highly variable attractiveness. For example, consider the fees for a one-day strategy course, comparing rates from inde- pendent consultants […]

Porters micro forces: supplier power. figures. For instance in Figure 9, the impor- tance of a purchase is linked with its emo- tional content, discretion is partly linked to urgency, and urgency needs to be traded off with importance. Competitive dynamics Porter’s five competitive forces is traditionally a very static model, which diminishes its use-

Buyer power: micro forces. The choice of these criteria is quite interest- ing. Importance and urgency we derive from prioritization. Urgency can be measured according to the lead times required to satisfy the need. Discretion is defined as being the extent to which customers have to fulfil a need or not. For example, in most

The micro competitive forces Whilst Porter does give some narrative help for assessing the five forces, this is not presented in the very powerfully distilled and visual format of his original model. For example, for competitive rivalry, Porter asks us to think about things like the relative concentration of rivals, such as how many are

Porters five competitive forces: key internal interdependencies. importance. Also, where a force can be split into sub-forces (discussed in the next subsec- tion) it can depict these sub-forces easily. Figure 5 gives an example of this format within the funeral industry. Here the funeral business is depicted as being relatively attrac- tive, particularly through the

Growth drivers: dot.com market for shares, 2000. inhospitable, this will clearly dampen the growth drivers, and if the growth drivers within a particular market are themselves tightening, for example due to life-cycle effects, then this will put a disproportionate and adverse pressure on Porter’s five forces, particularly in the bargaining power of buyers, and also

A critique of the model: value and limitations Porter’s five competitive forces are depicted in Figure 1. Porter’s starting point was that he wanted to account for long-term variances in the economic returns of one industry versus another. His genius resided in distilling the complex micro-economic literature into five explanatory or causal variables to explain

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-

Rethinking and reinventing Michael Porter’s five forces model Tony Grundy Cranfield School of Management, UK � Michael Porter’s five competitive forces model has been a most influential model within business schools but has perhaps had less appeal to the practising manager outside of an MBA and certain short business school courses. In this article it