Rethinking and Reinventing Michael Porter's Five Forces Model

Running head: BUSINESS STRATEGY
Business Strategy
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BUSINESS STRATEGY1
The article, “Rethinking and reinventing Michael Porter’s five forces model” talks
about the fact that the model of the competitive forces propelled the aspect of the strategic
management. The article brings out the genius of Michael Porter who distilled complex
micro-economic literature into the five causal variables: bargaining power of buyers, entry
barriers, rivalry, substitutes and bargaining power of suppliers. The article talks about the
value of the Porter’s model that was able to simplify the micro-economic theory into the five
important influences. The article states how the Porter’s value chain emphasized significance
of the negotiating power along with the bargaining arrangements that helped in the
determination of relative market attractiveness (Grundy 2006). The article discusses that there
exists a gap in between PEST and that of SWOT analysis which can be met with the help of
the five forces of Porter. The article states how hig-growth environment can help in
encouraging the entrants whereas a low growth environment discourages the entry of the
companies. According to Grundy (2006), five competitive forces of Porter can be said to be
highly independent with that of the other sub-systems within external environment. The
article discusses about the fact that Porter’s five forces should be understood in the form of a
wider system instead of self-contained unit. The original concept of Porter helps in explaining
the system interdependencies however it can be said that it is underdeveloped. The article has
discussed how the entry barriers in the center causes the buyers to reduce the entry barriers.
The article has talked about the fact that the five forces contain sub-ingredients that should be
explored. The article throws light on the aspect of competitive rivalry that talks about the
number of the players within the market along with their strategy. The number of the
competitors is indicative of sheer quantity of the players within market. The five competitive
forces of Porter can be said to be a static model that diminishes the aspect of the usefulness
however it can easily be provided with dynamic perspective. The competitive dynamics can
easily be understood both at macro and at the micro level. It can be said that at macro level,

BUSINESS STRATEGY2
these will have a great effect on industry cycle. In the event of an industry reaching the
maturity, the entry barriers can be said to increase along with the bargaining power of buyers.
The value of article lies in the fact that it helps in the examination of the systemic
interdependencies.
The article, “Linking Individual Performance to Business Strategy: The People
Process Model” talks about the fact that the organizations delivers the competitive advantage
in the short term and it prepares for the long-term success. The article states that there is a
link in between business strategy and the individual performance that takes place in the event
of the organizational capability embedding the people processes. Strength of linkage in
between the people process and that of business strategies can be said to vary across the
various processes. The models pertaining the human resource strategy comprises of vertical
linkage in between the strategy and the individual behaviour (Gratton et al. 1999). The
horizontal linkage in between the processes plays a crucial role as it ensures that the key
people processes have the cohesion along with the coherence. According to Gratton et al.
(1999), cohesion plays a significant role in the creation of synergistic benefits and it helps in
the successful implementation of the strategic plans of an organization. The article states that
vertical along with the horizontal linkage cannot capture dynamic nature of the lineage. The
word of “process” can help in talking about the philosophies, policies along with the practices
of an organization. The processes should be able to support policies of a company that can
help in the delivering of the short-term performance. It can help in preparing the foundation
for that of long-term transformation. The business objectives pertaining to the strategic plan
should be articulated to an individual. It should then be transformed into the clear objectives
that should be agreed on the annual or that of the bi-annual basis. The article discusses that
training focussing on business needs in the short term is an important aspect that helps in the
creation of a flexible along with a multi-skilled workforce. The maximising of the