Strengths of Porter's Five Forces Model

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Strengths of Porter's Five Forces Model

Porter's' five force model is an excellent tool that is applicable to most areas of business along with its complement the PESTLE analysis.
It allows current and potential business owners to critically analyze the potential of a business sector. It allows in a next phase to formulate a potentially successful strategic plan (strategy).
It allows to assess if a business in the industry is viable and if the firm possesses the business muscle needed to survive in that business arena.

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		1 Bomo Albert-Oguara, Nigeria
	Strengths of Porter's Five Forces Model The five forces theory looks at strategy formulation from the industry (macro) perspective. The theory is hinged on the concept that different competitive activities of players in the industry impact an individual company's performance. However the literature is replete with studies of alternative views of industry rivalry. The Resource based view (RBV), Blue Ocean Strategy and others are based on the view that individual performances driven by core capabilities and skills and other assets internal to it can create competitive advantage for the company. In these views, individual companies using these capabilities can outperform rivals even when the industry generally is lagging. Using the five forces theory is therefore dependent on whether the case actually demands that you use it. Such case is that you need to analyze the industry (buyers, suppliers, rival firms and so on) that interface with the firm, and if/how they are likely to affect your firm's success and ability to compete with rivals.