The Five Competitive Forces That Shape Strategy

An Interview with Michael E. Porter, Professor, Harvard University. Porter"s five competitive forces is the basis for much of modern business strategy. Understand the framework and how to put it into practice.

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25 thoughts on “The Five Competitive Forces That Shape Strategy”

  1. If you don’t fully understand Porter’s Five Forces model then watch this
    interview with Michael E. Porter, Professor, Harvard University. Professor
    Porter explains the framework and how you can put it into practice.

  2. I read three of his books. makes you want to put a bullet in your brain
    from boredom but they teach a lot.

  3. This comment is for Michael Porter – Michael, I see that you suffer from a
    physiological problem similar (probably the same) to me. You have an
    incredibly powerful intellect, but your gestures betray your need for
    constant sensory stimulation. Out of curiosity; Have you ever experienced
    any signs of awake bruxism?

  4. Bullshit, bullshit, “business word”… this guy never actually answered a
    question!

  5. Doesn’t Amazon still lock away their Kindle division in a ‘Area 51’ type
    location within their own company?

  6. This points out that it is important to look at the impact these forces
    have on margins, which often gets lower scrutiny than direct competitors
    who impact sales. A business needs to think about all of these forces
    because they all make an important contribution to profits or, if managed
    poorly, losses.

  7. i believe another point: forces in
    ‘brainwashing on customers demand on products or services’
    is much important too than making a command sense of purchase.

  8. Actually, if you’re not closely familiar with Porter’s work, this is a
    video that makes no sense. If one understands the concepts, this isn’t too
    bad. He did answer the questions. You just have to be able to follow the
    thinking from the underlying research. Porter, like most of research
    doctorate holders, has good ideas…they may not always work consistently
    in practice. Worse, there are always flaws with research–hence we support
    or reject the hypothesis and devise an alternate hypothesis. 

  9. Classic old school thinking – thanks for the contribution to strategic
    thinking from an external perspective – use with Adizes Business Life Cycle
    explanation for another external perspective…

  10. The intensity of competitive rivalry..For most industries, this is the
    major determinant of the competitiveness of the industry. Sometimes rivals
    compete aggressively and sometimes rivals compete in non-price dimensions
    such as innovation, marketing, etc. number of competitors,- rate of
    industry growth,- intermittent industry overcapacity , exit barriers ,
    diversity , informational complexity and asymmetry ,- fixed cost
    allocation per value added , level of advertising expense

  11. Two points he made, that business school does not often stress. Once you
    apply the Porter model to understand your industry, you then have to 1)
    discover how your industry is changing. These changes could launch you to
    higher profit if you can respond to them; and 2) align the organization so
    that everyone knows the strategy. It is no longer a secret (as in old biz)
    – you want every employee, supplier, buyer and even customer to know your
    strategy. Excellent points. I think Steve Jobs did exactly this for
    Apple. Of course the Apple folks did much more and they are high profit
    despite a sometimes frustrating product and service.

  12. Toni Daugherty – sure Steve Jobbs was an important visionary who inspired
    his staff to do things differently and think creatively. But, the best move
    that Apple ever made was to promote Steve Ives’s to Head of Design. This
    then made their product range look incredibly different and difficult to
    imitate, thus why they are now one of the most sought after brands due to
    the look (aesthetics) of the product. There are substitute brands in the
    market to compete with Apple, with the same functionality of the iPhone,
    but Apple have kept their margins high due to the desirability of the
    product. 

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