Are Porter's Five Competitive Forces still applicable in today's business environment?

(250
words)
Michael Porter designed the five competitive forces in the market industry which is

micro-environment in approach as business strategy. A lot of strategists in industrial organization

economics adopted such approaches as a replacement for the then-popular SWOT analysis. The

five forces enumerated by Porter are 1) Threat of new entrants; 2) Threat of substitute product or

services; 3) bargaining powers of customers; 4) bargaining powers of suppliers and 5) intensity

of competitive rivalry (Kotler & Keller, 2009).

It has been recognized in the business world that the major concerns for a successful

operation does not rely mainly on the profit that they can make but also major considerations are

given as to the suppliers, the buyers, the competitors as well as the other products which may be

preferred by the customers in the long run. Such threats are needed to be analyzed accordingly.

In todays context of business activities we can still appreciate the applicability of

Porters concept of business strategy. In these five forces highly considered the company may be

able to assess the stability of the business. Major changes can be adopted while the market is

ever changing. The five forces give insights to the company the strengths or weaknesses of own

company as well as those of the competitors. Small players or new competitors can be

considered also as threat which by applying appropriate approach, new entrants cannot easily

penetrate in the market. As has been intended by Porter, there must be thorough analysis with the

customers purchasing powers, the suppliers bargaining powers and the potential entry of new

product preference. In here the company can strategize production of new alternative products

which the public may later on patronize. Such approaches seem to be applicable even these days.
 References

Kotler, P. & Keller, L. (2009) A Framework for Marketing Management. 4th ed. Pearson
Prentice Hall.