Since the mid twentieth century, strategy has been spreading worldwide (Bracker, 1980). Nowadays, the strategic management require much more than the operational management tasks. According to Johnson & Scholes, "Strategic management includes understanding the strategic position of an organization, strategic choices for the future and turning strategy into action" (Johnson & Scholes, 2002). This is the delicate challenge of top managers.
At the same time, numerous conceptual models have been developed and "the past dozen years in business have witnessed an explosion in the use of management tools and techniques" (Rigby & Bilodeau, 2005). The conceptual models provide to senior managers a better understanding of a business situation and help them to perform analysis and make strategic decisions. A model is not able to take a decision; however, it can help to formulated it (Recklies, 2001). Each situation is different and requires judgment and appreciation in addition to a framework. Accordingly, there is no one right answer.
[...] Since that time, the Five Forces model has become a reference for analyzing industry structure and make strategic decisions. So far, the Five Forces model is uses worldwide by companies, business school and governments (Porter, 1998; Grunty, 2006; Shaughnessy, 1996; Recklies, 2001; Brandenburger, 2002), recognized as a dominant strategy tool to analyze the attractiveness of an industry. To begin with the advantages of the Five Forces, the simplicity of application can be chose as a determinant factor of its success. [...]
[...] The porters Five Forces model is inadequate to a completely new industries. Hence, the Five Forces framework is design to existing markets only rather than it is possible to create new markets. This situation goes over the limits of the Five Forces compared to the Blue Ocean Strategy that included this possibility. Kim & Mauborgne say, “Blue Ocean Strategy is a way to make the competition irrelevant by creating a leap in value for both the company and its customers.” (Kim & Mauborgne, 2005). [...]
[...] (2006) ‘Rethinking and reinventing Michael Porter's five forces model', Strategic Change, vol pp.213-229. McFarlan, F. (1984), changes the way you compete', Harvard Business Review, Vol CITED by Thurlby, B. (1998) ‘Competitive forces are also subject to change.' Management Decision, vol.36 p19. Johnson, M.W., Christensen, C. M., Kagermann, H. (2008) ‘Reinventing Your Business Model', Harvard Business Review, vol pp.50-59. Knott, P., (2008) ‘Strategy tools: who really uses them?', the Journal of Business Strategy, vol pp.26-31. Porter, M.E. (1979) competitive forces shape strategy', Harvard Business Review, vol pp.137-145. [...]
[...] This model has helped management of this public administration to analyze the situation and define a strategic plan. The macro-environment can be influenced by several factors affecting senior managers in their decisions. Accordingly, it is important for them to anticipate the future impact of the factors. The PESTEL analysis will help managers to analysis the environmental influence in six categories, political, economic, social, technological, environmental and legal. Managers must forecast and think what factors are more likely to change. Undertaking the general environment helps senior managers to take actions by anticipating the critical changes and decreasing the risk. [...]
[...] II MODEL DESCRIPTION The Porter's five forces model is a useful strategy tool to analyze what makes an industry attractive. The Harvard Business School professor, Michael E. Porter, has introduced this model thanks to the article Competitive Forces Shape Strategy” (Porter, 1979). According to Porter, “competition in an industry is rooted in its underlying economic structure and goes well beyond the behavior of current competitors.” (Porter, 1998). Hence, he has developed this strategy referring to the following five forces[1]: potential entrants, substitutes, buyers, suppliers and existing firms. [...]
APA Style reference
For your bibliographyOnline reading
with our online readerContent validated
by our reading committee
