Critique of Strategic Concepts: Porter's Five Forces and PESTLE Analysis

Running head: STRATEGIC MANAGEMENT
Strategic Management
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1STRATEGIC MANAGEMENT
1. Critique of strategic concept of analysis Porter’s Five Forces
Porter’s five forces is a very strategic framework that provides guidelines for
investigating competition, investment attractiveness and profitability within a particular
industry. This model was introduced by Michael E. Porter in his book “Competitive
Advantage: Creating and Sustaining Superior Performance”in the year 1980 (Argyres and
McGahan 2017). It was developed as a strategy tool that aims to examine the competitive
environment of the industries. There are a total of five forces in the Porter’s framework that
shape each and every market and industry. These five competitive forces are threat of entry,
threat of substitutes, power of the buyers, power of the suppliers and competitive rivalry
(Yunna and Yisheng 2014). The threat of entry is associated with the complexity to enter a
specific industry. Threat of substitutes on the other hand is considered as competitive goods
which has the potential to replace the offerings of an organization. Apparently, consumer
buying power is all about the bargaining ability of the customers in order to control the
profitability of the suppliers. The fourth force, which is- supplier’s power is concerned with
how suppliers can reduce the power of the organizations in debate for buying essential
resources as well as their profitability. Lastly, competitive rivalry describes how rest of the
four forces interrelates with each other and shapes the competition structure within a
particular industry. It is considered to be one of the best tools used for strategic planning.
Every successful corporate and business strategy must modify the above mentioned five
forces in such a way that it can improve the position of the industry.
2. Critique of strategic concept of analysis Pestle
PESTLE model is one of the widely selected tools for determining the macro
environment (Dockalikova and Klozikova 2014). It is a very popular concept in competitive
and strategic analysis. However, it is not yet known who the real developer of this model is. It