Basis of Five Forces Strategies

Five Forces (Porter) | Five Forces Analysis
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Bomo Albert-Oguara
Manager, Nigeria

Basis of Five Forces Strategies

The five forces theory looks at strategy formulation from the industry(macro) perspective. The theory is hinged on the concept that different competitive activities of players in the industry impact an individual company's performance. However the literature is replete with studies of alternative views of industry rivalry. The resource based view (RBV), blue ocean strategy and others are based on the view that individual performances driven by core capabilities and skills and other assets internal to it can create competitive advantage for the company. By the same token, individual companies using these capabilities can outperform rivals even when the industry generally is lagging. Using the five forces theory is therefore dependent on whether the case actually demands that you use it. In which case you will need to analyse the industry (buyers, suppliers, rival firms and so on) that interface with the firm and are likely to affect its success and ability to compete with rivals.

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