Awareness of Porter’s Five Forces Framework: A Research Paper
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Ioannis Petrou HadjipetrouFaculty of Business, Alexander College, Larnaca 7102, CyprusCorresponding Author
DOI:
https://doi.org/10.63385/jemm.v2i2.96Keywords:
Competitive Strategy, Down’s Three New Forces Framework, Five Forces Framework, StrategyAbstract
In 1980, a young economist called Micheal E. Porter made a revolution in the field of Industrial Organization by publishing his article on the attractiveness of industries and the five forces that influence them. Although the model still has some validity, it has heavily been criticized as obsolete since the introduction of internet-based technologies in the 1990’s. In addition, the model has been criticized for its lack of quantitative analysis, as well as from the fact that globalization, digitalization, and de-regulation has dominated the global economy and changed the market’s perception on the model. Tehrani and Rahmani, state that globalization with the introduction of global markets and advances in information technology shaped the changes of the world economy during the last two decades. Porter’s five forces model creates the fundamentals for industry profitability and attractiveness that shaped modern industrial organization. A central question in respect of strategy is "why some organizations succeed and why some fail". Broadly speaking, the reason of firm to succeed or fail is a matter of interpretation. This question produces further questions such as "why they differ, and how they choose a particular strategy (selection of a particular course of action)". Thus, organizations operating in an environment that is changing faster than before, and the way that the organization reacts to them is known as business strategy, and this creates the fundamentals for organization theory and the Porters’ five forces model.
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This work is licensed under a Creative Commons Attribution 4.0 International License.
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