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Anil Kshatriya
Professor, India
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Business Networking: Forces are Getting Connected
I think, there is an interesting phenomena around us due to business networking. Can't we say that the basic model has now evolved into a more integrated one? I believe the 'forces' are now getting connected. For example, threat of new entrant and threat of a substitute consolidate in the case of "Chinese" product entering competition. Similarly other forces are forming permutations. I would like to hear from all on this...
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durgaaprosad, India
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Porters 5 Forces My personal view is not to struggle at the same place, rather in today's economy the best is to have a Blue Ocean Strategy. Of course the choice would depend on the SWOT/TOWS matrix.
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Pradip Kumar
Educator, India
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Five Forces Theory of Porter - Substitutes Well, the Chinese (for that matter any country) entering into a market (read country) is not a substitute. A substitute is a product or sometimes product category that might be used as replacement for the product of the industry. For example, polycarbonate is a substitute for glass eyeglasses used in spectacles; nylon bags used in grains transportation are substitute of jute bags.
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John D. Ramos, United States
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Five Forces are Linked Corporate strategy may be developed and implemented in various ways within a regulated and competitive environment. There are linkages between competition, strategic action, and regulation in the global economy. With emerging markets slowly gaining traction the underpinning of each link is contingent on how one angles the analysis of Porter’s five forces.
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GRANZOTTO ARAMIS, Italy
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Integration of Strategic Forces A real change is represented by networking. I agree with you regarding the interconnection of the forces in the system and appreciate every day this evolution of the economic and financial events because of all of this.
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Zanele
Events Marketer, South Africa
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Five Forces Connectedness Barriers of entry in my view are insignificant as any potential investor's entry strategy is based on thoroughly researched market and environment scan therefore cost and capital become primary. Similarly new entrants may provide a substitute if faced with a highly rigid, regulated and insulated barrier and this then marries connectedness of entry to barriers to substitutes.
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Mario A. G. Lopez, Philippines
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Porter Model should Evolve for Current Turbulence From the very start most of us accepted the probability that the model, formed within specific contexts, would not be wholey applicable as conceived in many developing countries. Formed as it was in more stable times, the 5 forces model has yet to evolve for applications in more turbulent times.
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Mario A. G. Lopez, Philippines
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The Rubustness of the Porter Five Forces Model It is however a tribute to its robustness that people find Porter's 5 Forces useful as a starting model, regardless of the modifications they may find necessary. The key, as many have already written, is to make the modifications as justified or otherwise demanded by the specific set of conditions faced by the organization/company vis a vis specific markets and/or market segments.
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Anil Kshatriya
Professor, India
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@ Everybody Deal all, by use of the term Chinese I don't intend, nor am I attempting, to refer to a country specific strategy. Indeed my aim is to draw attention to "cost leadership" that these products manifest. Looking at the combination of forces I think there will emerge a Two-Dimensional 5 Forces Analysis.
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Anders Nystrom, Sweden
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More Integration in the Factors of the Model Everything is getting more integrated today. If you have a systemic view, individuals, groups and organisations are all systems, partly open, not open or not closed. It is the same regarding factors in a model. Mostly management theories are build on the opinion that systems are closed. If systems were closed they end up dead. If a system were open, it would be dissolved. Systems have always been partly open. But now the mutual boosting feedback between systems has become faster end stronger. Meanwhile the mutual weakening feedback has become less or was almost eliminated. In the global financial system this is obvious.
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GRANZOTTO ARAMIS, Italy
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Interconnection and Flexbility All factors are connected to each other. In the financial systems this is obvious and you can see effects almost immediately. Unlike in other sectors where the counter reaction may show a time lag due to the rigidity of the system.
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SARA F
Italy
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Use Bidirectional Arrows in Porter's Five Forces I think that today this model can be used with a small but important modification: the arrows have to be TO the industry parties and FROM industry parties, as Brandeburger and Nalebuff argued.
With bidirectional arrows we mean that five forces are not only a competitive threat but simultaneously collaboration opportunities. This is important to consider in a SWOT analysis.
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Anil Kshatriya
Professor, India
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@ Sara F This is an excellent thought. Bidirectional arrows is really true. All forces are now inter-linked as many players use advanced systems.
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Anders Nystrom, Sweden
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Cognitive Maps Needed to Deal with Mutual Responses Old theories split the world into clear causes and effects, today with mutual responses it is not possible to simplify the world any longer like that. In today's messy situation you need to use models which are a cognitive map. Porter´s five force is not a cognitive map. There are some existing systemic models. Marwin Weisboard, Jan A Johansson and me have created systemic models, which are more of cognitive maps.
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Ser Wah Oh
Engineer, Singapore
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Porter's 5 Forces is a Static Model In fact Porter's 5 Forces is a static model. When you're looking at substitutes, new entrants, suppliers or buyers, you're looking at these forces in a static view. There are dynamic forces that cannot be represented by this model. And having a good framework to cover dynamic forces is difficult. So, we've to used our intelligence to gauge the dynamic parts such as looking at network and changes, e.g. competitors becoming partners, etc.
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