Why Porter's Monitor Consulting Company Failed

Five Forces (Porter) | Five Forces Analysis
Knowledge Center


Gary Wong
Consultant, Canada

Why Porter's Monitor Consulting Company Failed

In 1983, Michael Porter co-founded his consulting company, the Monitor Group. In November 2012, Monitor was unable to pay its bills and filed for bankruptcy. One would think a strategy consulting firm would be able to avoid going into bankruptcy. Astonishly, the Monitor Group itself didnít believe in the Five Forces Analysis and hadnít used it for years.

Steve Denning in a Forbes.com article wrote: "Porter began his publishing career in his March-April 1979 Harvard Business Review article, 'How Competitive Forces Shape Strategy', with a very strange sentence: 'The essence of strategy is coping with competition.' Ignoring Peter Druckerís foundational insight of 1973 that the only valid purpose of a business is to create a customer, Porter focused strategy on how to protect businesses from other business rivals: "The goal of strategy, business and business education was to find a safe haven for businesses from the destructive forces of competition."
In a following article he concluded: "Firms will only survive if they respond to customersí wants and needs in a world in which customers have choices and accurate information as to what those choices are.
It was Monitorís failure to do this that led to their bankruptcy. Monitor appears to have been successful, but overall, it didnít generate enough customer delight to fund its various activities".

What might be some the lessons learned? One is to tread carefully before jumping onto a perceived guru's new idea. Is it valid? A possible myth? Fallacy?


Warren D. Miller, CPA, CFA
Strategy Consultant, United States

Michael Porter & the Monitor Group

'Perceived guru'? What the heck is that? IMHO, ...


More on Five Forces (Porter) | Five Forces Analysis:
Assumptions of the Five Forces Model. Limitations
5 Forces in Emerging Industries
Government as 6th Force in Porter's Five Forces
MEDIA as the 7th Force in Porter's Five Forces
Industry Analysis model
Strengths of Porter's Five Forces Model
Substitutes and the Five Forces Model
How does Information Technology alter Porter's 5 Forces
Evolution in our Expectations of Business and Porter's 5 Forces Model
Business Networking: Forces are Getting Connected
Bargaining Power of Buyers. Examples
How to Deal with Competitors in Five Forces Analysis?
Measuring / Calculating the Five Forces of Porter?
There are More than Porter's 5 Forces!
👀Why Porter's Monitor Consulting Company Failed
Does Competition Increase the Need for Segmentation?
The New Industrial Economics School
🔥Porter's 5 Forces Framework in Non-competitive Situations?
Special Interest Group

Do you have a keen interest in Five Forces (Porter) | Five Forces Analysis? Become our SIG Leader

Five Forces (Porter) | Five Forces Analysis
Knowledge Center

About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2022 12manage - The Executive Fast Track. V15.8 - Last updated: 7-12-2022. All names ô of their owners.