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Management: T He Porter Five Forces Model

962 words - 4 pages

In my opinion, I think that the Porter five forces model is still relevant in today’s competitive environment.
It is because porter’s five forces can give the managers in the corporate to analyse the current situation of their industry in a structured and understand easily way (Porter 2001). Based on the strategic management view, it is good for managers of any organization in the similar industry or sectors to understand the five competitive forces acting and between organizations in the similar industry or sector.
Secondly, this model can used to compare the impact of competitive forces on their own organization with the impact on their competitors. Competitors ...view middle of the document...

Also, it give the firms different choices from which they can know that which force is at their favor and which is not and after that they can create a strategy which give them more advantage in having a competitive position in the market (Johnson et al 2009). So, the five forces give the managers different options (Johnson et al 2009). For instance, the top management of a particular bank uses this framework to know about the performance of all of the financial institutions and see which the financial institution that makes the customers more demanding and after that introduce a strategies for taking the advantage of this situation (Johnson et al 2009).
In addition, it provides the firms a dynamical analysis to identify the changes that might take place in the future and they also could see the external environment and the five forces together and after that they can get the direction on what would be change in the competitive forces (Johnson et al 2009).
Furthermore, it also helps the firms know that how the different competitors affected by these forces (Johnson et al 2009). It means that how the bargaining power of suppliers, bargaining power of buyers, threat of new entrants and threat of substitutes would influence the different competitor’s compete in that particular similar industry and according to different size industry. All the firms among the industry are different and they affected differently (Johnson et al 2009). Some of the firms are large size and capital while some of the firms are small or medium and therefore their industry structures are not the same (Johnson et al 2009). For instance, in banking industry, there are retail banks, corporate banks and western unions. The affect could uncover by conducting the industrial analysis and therefore the firms could have the strategies to continue exist in the market (Johnson et al 2009).
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