Porter 5 Forces – Swiss Knife of Strategy
by Chris Leong
Although, this post is not about technology but I always believe in sharing information and knowledge. Recently in my MBA program, i was asked to write about a theory which I find most useful in strategy. So here i will be sharing some of my views about a popular theory called Porter 5 Forces.
Here’s a brief intro about Porter 5 forces for those who don’t know. (Reference from Wikipedia.)
Porter’s five forces analysis is a framework for the industry analysis and business strategy development developed by Michael E. Porter of Harvard Business School in 1979 . It uses concepts developed in Industrial Organization (IO) economics to derive five forces which determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one where the combination of forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition".
In the assignment, I review how Porter 5 forces is useful in many ways and can be combined with multiple theories. It basically provides a good platform for people to view the “market” at different angles. It allows you to analyze:
- Whether a firm should go upstream or downstream in integrating its operations
- It’s competitors from various angles
This can be used as basis to decide what kind of strategy to be implemented.
Get the attachment about My Eureka Moments about Porter 5 Forces
For those who wants to use my material feel free to do so. Just reference it back to my blog 🙂