Porter’s Five Forces Model is a strategy development tool created Michael Porter to help business leaders develop successful competitive strategies based on several forces present in any given marketplace. Porter’s model rose in prominence to gain industry standard status and has had far reaching influence among business leaders for decades. Despite its overwhelming popularity, does this model stand up to criticism and will it translate sufficiently into international marketplaces as well as it has in the domestic markets? When studying this model in light of those questions, it can be found that the fundamentals that it is built upon are strong and the model is transferrable while still holding to its foundational principles. An examination
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The world economy is more connected than ever which evidences what Porter terms the “threat of new entrants”. Consumers can now purchase an increasing number of products directly from overseas suppliers which has increased buyer power and customer leverage. Some barriers to international purchasing have been shattered by technology. More businesses are going to be considering global factors even if they may not have needed to in the past, and that trend is only going to continue. “As a result of globalization, the world has become interconnected and interdependent to an extent never previously experienced. If there was ever a need for proof, the Great Recession, and the speed with which an essentially local crisis in the US has spread around the world, offered unequivocal evidence of the level of connectivity among countries”. (Nachum, 2011, para. …show more content…
The key elements included foster critical thought and contain necessary items that a business needs to consider before making an investment to expand into a new playing field. One of the reasons it has become a mainstay is that it encompasses strong guidelines that if followed, will ensure a firm has done a thorough job of preparing for success. The five forces are nimble enough to relate to domestic and international settings alike, and will still hold relevance as the global economy further
The world economy is more connected than ever which evidences what Porter terms the “threat of new entrants”. Consumers can now purchase an increasing number of products directly from overseas suppliers which has increased buyer power and customer leverage. Some barriers to international purchasing have been shattered by technology. More businesses are going to be considering global factors even if they may not have needed to in the past, and that trend is only going to continue. “As a result of globalization, the world has become interconnected and interdependent to an extent never previously experienced. If there was ever a need for proof, the Great Recession, and the speed with which an essentially local crisis in the US has spread around the world, offered unequivocal evidence of the level of connectivity among countries”. (Nachum, 2011, para. …show more content…
The key elements included foster critical thought and contain necessary items that a business needs to consider before making an investment to expand into a new playing field. One of the reasons it has become a mainstay is that it encompasses strong guidelines that if followed, will ensure a firm has done a thorough job of preparing for success. The five forces are nimble enough to relate to domestic and international settings alike, and will still hold relevance as the global economy further