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Naveen Ahuja, India
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Government as 6th Force in Porter's Five Forces
Who can give an explanation of the government factor in Porter's Five Forces? What is it? Who introduced it?
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Abdur Rob, Bangladesh
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Example Goverment Force in Five Forces
I can't tell you who introduced this 6th Force, but the example below can justify the reason.
Nowadays, many Governments have established regularity bodies. As an example, in Bangladesh, Bangladesh Telecom Regularity Commission (BTRC) fixed the price ceiling (BTD 0.25 - BDT 2.00) for cellular phone. This is one of the forces for the cellular operators to maintain this price range.
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Alchui, Singapore
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Government and 5 Forces
The Government plays the role of "Caregiver/Policeman" who regulates the economy. Government "provides" the land space for development, upgrading and funding schools and skills, size of population and labour force, attracts foreign investors, encourages entrepreunership, regulates the imports and exports, regulates the industries and its business policies, etc.
Also the Government will "nurture" growing industries, thus some firms/industries benefit from this force more than the others.
See also Porter's Diamond of National Advantage.
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Dr. Uditha Liyanage, Sri Lanka
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FiveForces
Government, the proposed sixth factor may well impact all five factors.
Moreover, the 5 forces have to be placed within a context or framework, a key element of which is the Government.
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Anders Nystrom, Sweden
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The 6th Force and More
I have a background in systemical thinking, the theories of sociotechnical systems. Generally to handle forces you have to define borders of different levels of systems as a first step. Porter´s model is defined as the market and this Government as 6th force is just one of several forces on the level above the market, e.g. nations or EU. Another force on the level above is institutional competition, there are more (that is another story). The forces on the level above effect the whole market system at the same time and in similar ways.
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K. Gopalakrishnan, India
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Govt. as the 6th Force
I had modified the Five Forces of Porter with Government as the 6th Force for my pharmaceutical management students in ies college, bandra, mumbai long back. In pharma business this is very relevant and this was well accepted by pharma professionals who came to know about this modification of the 5 forces.
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Stefan Guenther, Germany
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Regulatory Bodies as the 6th Force
I work in the financial industry and particularly in my field the existence and activity or non-activity of whatever regulatory body is quite visible right now and will no doubt play a more important role in the future, thus defining the playing field and the rules for actors. In the investment industry I regard this 6th force as one of the most important ones, more than new market entrants in this market under pressure.
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David Paul, India
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Re: Government sixth factor?
If you give a chance of reading the Book 'Only the Paranoid Survive' by Andy Grove, he explains the role of the government as a sixth force. The HBR article of January 2008 by Porter, disagreed with all the views and in toto of the whole process, he says that the government is not a force which enduces us to understand the industry profitability but, an important factor. Remember he says that the factors are nothing but complementors as proposed by Grove and disagreed by Porter.... Porter in his competitive advantage of Nations gives a much better outlook to the role of the government in this regard, Thanks and regards.
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Deb M, Singapore
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Role of Government
Government Forces can sometimes be categorized as a Business Entity like in the case of a state controlled enterprise or more often as a Barrier. In most countries, given its executive and legislative power, Government acts as a barrier (read: regulator).
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Jeswan SinghPS
Engineer, Malaysia
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Free Market or Controlled Economy
Porters model works well or is more suited to a free market economy where the main determinants are the forces of supply and demand. In a controlled economy where there is government intervention to meet certain social objectives, then the business rationale is different and often results are achieved at a much higher cost.
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Gianvittorio
Turnaround Manager, Netherlands
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Government in Five Forces
Hi, if you believe Mr. Porter then government is not one of the forces.
See this
video, in which he talks about why government should not be considered one of the forces.
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