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Thursday, September 10, 2009

Porter's five force Model Criticisms?


I missed last class as I had to fly out to Ohio for a family emergency. However I did ask my sister (Rita) what topics were covered in class and she mentioned a big chunk of time was dedicated to talk about Porters five forces and six forces model. So I decided to do a little research and have something on my blog in regards to this topic.

Based on my research there are criticisms out there on regards to the model. According to Stewart Neill, Kevin P. Coyne and Somu Subramaniam the three major crticisms are :

That buyers, competitors, and suppliers do not interact
It creates barriers to entry)
Low uncertainty allows participants in a market to plan and respond to competitive behavior.
Here is an interesting fact/Example I found on a website related to Porter's six force model:

"Intel Corporation is the world's largest semiconductor company and the inventor of the X86 architecture series of microprocessors, the processors found in most personal computers....
.According to most references, the sixth force is government or the public. Martyn Richard Jones, whilst consulting at Groupe Bull, developed an augmented 5 forces model in Scotland in 1993, it is based on Porter's model, and includes Government (national and regional) as well as Pressure Groups as the notional 6th force. This model was the result of work carried out as part of Group Bull's Knowledge Asset Management Organisation initiative."

1 comment:

  1. Good idea for catching up with the missed class. Let me know if you have further questions.

    ReplyDelete