Assumptions of the Five Forces Model. Limitations

Five Forces (Porter) | Five Forces Analysis
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Jane, US

Assumptions of the Five Forces Model. Limitations

The Five Forces model has two basic premises:
The first one is that the goal of a business is long-term profitability.
The second one is that the intensity of competition in an industry is neither a matter of coincidence or bad luck: Competition is rooted in an industry's economic structure.


Tom, US

Assumption in Porter's 5 Forces: Competition

Yet another major assumption of Porter's Five Forces Framework is that he views all industries as based on COMPETITION. However there are important exceptions on this view, such as for example in the automotive industry, where strong COLLABORATION between assemblers and their suppliers have turned out to be very beneficial for all parties. The same may be the case for knowledge-intensive industries, since knowledge sharing increases its overall value. Furthermore, Edward Freeman argues that the economic paradigm of competition should be replaced by the more sustainable paradigm of collaboration with stakeholders.

Danny, UK

Assumption: Product (and Services) Markets...

There is yet another important assumption in the Porter Model: that firms are competing only in PROD...

Student (University), United Kingdom

Limitations of Porter's 5 Forces Model

One more limitation that clearly stands out is that the model does not consider micro, meso or macro...

Kurt Ludikovsky
Consultant, Austria

Economic Crisis in Five Forces

Then you have not asked all questions. You might be right if you don't consider all factors. An eco...


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