Porter's Five Forces Model for Industry Analysis
This essay is an attempt to apply the Five Forces Model for industry analysis and business strategy development formed by Michael E. Porter of Harvard Business School in 1979 that draws upon industrial organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Within the ambit of Porter’s typology, this essay aims to analyze the attractiveness of industries for investment and seeks to identify their potential for change or adaptability within the context of the inherent constraints and opportunities which exist in any given organizational environment.
To achieve the above, a thorough introductory outline of the Five Forces Model will be laid out, citing its content and its pros and cons as a tool for analysis and business strategy in the organizational environment. Concomitantly, relevant concepts shall be defined in order to generate more understanding of the subject matter. A case study of the mobile telecommunications sector will be carried out in order to contextualize the topic and put issues into perspective. A conclusion will then be drawn from the discourse.
To begin with, any attempt to define a concept requires an investigation into its characteristics. For the term ‘organization’, it is perhaps easier to say what it is not rather than what it is. However, according to Porter, Lawler and Hackman (1975) (quoted in ABE (2010:10), organizations have the following attributes: they are composed of individuals and groups; they have some degree of permanence (they are going concerns); they exist in order to achieve certain goals; and they involve specialization and require rational control and co-ordination.
In other words, therefore, organizations are social entities that involve two or more people. Secondly, they are permanent in the sense that their existence is not usually tied to the achievement of one goal. However, some organizations such as pressure groups cease to exist after
To achieve the above, a thorough introductory outline of the Five Forces Model will be laid out, citing its content and its pros and cons as a tool for analysis and business strategy in the organizational environment. Concomitantly, relevant concepts shall be defined in order to generate more understanding of the subject matter. A case study of the mobile telecommunications sector will be carried out in order to contextualize the topic and put issues into perspective. A conclusion will then be drawn from the discourse.
To begin with, any attempt to define a concept requires an investigation into its characteristics. For the term ‘organization’, it is perhaps easier to say what it is not rather than what it is. However, according to Porter, Lawler and Hackman (1975) (quoted in ABE (2010:10), organizations have the following attributes: they are composed of individuals and groups; they have some degree of permanence (they are going concerns); they exist in order to achieve certain goals; and they involve specialization and require rational control and co-ordination.
In other words, therefore, organizations are social entities that involve two or more people. Secondly, they are permanent in the sense that their existence is not usually tied to the achievement of one goal. However, some organizations such as pressure groups cease to exist after
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