5 Forces Not for Non-competitive Situations
Jaap de Jonge, Management Consultant, Netherlands
Hi Liyth, any model (as used in science) is based on assumptions (premises). These typically limit the applicability of the model; they determine the boundaries of its usage.
The 5 forces model by Porter is no exception to the above, and is based on following assumptions:
- The goal of a business is long-term profitability.
- All industries are based on competition
- The intensity of competition in an industry is rooted in an industry's economic structure which is determined by Porter's 5 forces.
The above does not mean that there is no world possible outside of the boundaries.
It does however mean that if you'd like to explore industries/situations outside of these assumptions you should not use Porter's model.
Here you can find more on the assumptions behind the 5 forces model