This week’s podcast is on the well-known Five Forces framework by Michael Porter. I go through some of its limitations and where I think it works best.
Michael Porter’s five forces:
- Bargaining power of suppliers
- Bargaining power of buyers
- Threat of Substitutes
- Barriers to entry / threat of potential entrants
- Degree of existing competitive rivalry
- Role of complements?
My 4 problems with this are:
- It doesn’t work for dynamic and non-classical strategy terrains.
- It doesn’t work for platforms and ecosystems.
- It doesn’t work with SMILE marathon dimensions, particularly innovation.
- The addition of complements doesn’t really cover the emergence of a connected, digital world.
I also cited the 4 terrains from BCG:
Related podcasts and articles are:
From the Concept Library, concepts for this article are:
- 5 Forces
- 4 Terrains and Strategies (BCG): Predictable vs. Malleable
- SMILE Marathon
From the Company Library, companies for this article are:
I write, speak and consult about digital strategy and transformation.
My book Moats and Marathons details how to measure competitive advantage in digital businesses.
I also host Tech Strategy, a podcast and subscription newsletter on the strategies of the best digital companies in the US, China and Asia.
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