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 is argued that whilst there are a number of reasons why the model has not achieved greater currency, most importantly it can be developed a lot further.
� The paper looks at a number of important opportunities for using Porter’s model in an even more practical way, including: mapping the competitive forces, which can vary sig- nificantly over market and competitive terrain and within the same industry; under- standing its dynamics; prioritizing the forces; doing macro analysis of the sub-drivers of each of the five forces; exploring key interdependencies, both between and within each force.
Copyright © 2006 John Wiley & Sons, Ltd.
ested in taking his concepts to an even more macro level, particularly to the competitive advantage of countries, rather than to micro economics. Porter’s model, whilst it has done extremely well in occupying textbook space, does not seem to have captured the imagina- tion of other theorists. In contrast with the resource-based theory of competitive advan- tage, which has spawned a considerable liter- ature, it seems to have become, as it were, frozen in time.
The five competitive forces model propelled strategic
management to the very heart of the
management agenda
Strat. Change 15: 213–229 (2006) Published online in Wiley InterScience (www.interscience.wiley.com) DOI: 10.1002/jsc.764 Strategic Change
* Correspondence to: Tony Grundy, Cranfield School of Management, Cranfield University, Cranfield, Bedford MK43 OAL, UK. E-mail: [email protected]
Introduction
When Michael Porter conceived the five com- petitive forces model, it propelled strategic management to the very heart of the manage- ment agenda.The framework became a centre- piece of texts on business strategy and strategic management, and essential examina- tion material on MBA and similar courses glob- ally. But what has become of his original five competitive forces? It would appear to be the case that not a great deal has occurred to develop this thinking since the early 1980s (except, perhaps, for Hamel and Prahalad, 1994). Porter appears to have been more inter-
Copyright © 2006 John Wiley & Sons, Ltd. Strategic Change, August 2006