4 Problems with Michael Porter's 5 Forces (63)

This week’s podcast is on the well-known 5 Forces framework by Michael Porter. I go through some of its limitations and where I think it works best.

You can listen to this podcast here or at iTunes, Google Podcasts and Himalaya.

Michael Porter's 5 Forces:

1. Bargaining power of suppliers
2. Bargaining power of buyers
3. Threat of Substitutes
4. Barriers to entry / threat of potential entrants
5. Degree of existing competitive rivalry
6. Role of complements?

My 4 problems with this are:

1. It doesn’t work for dynamic and non-classical strategy terrains.
2. It doesn’t work for platforms and ecosystems.
3. It doesn’t work with SMILE marathon dimensions, particularly innovation.
4. The addition of complements doesn’t really cover the emergence of a connected, digital world.

Related podcasts and articles are:

• 4 Problems with Hamilton Helmer’s 7 Powers (Jeff’s Asia Tech Class – Podcast 62)

From the Concept Library, concepts for this article are:

• 5 Forces
• Innovation
• 4 Terrains and Strategies (BCG): Predictable vs. Malleable
• SMILE Marathon

From the Company Library, companies for this article are:

• None

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I write and speak about digital China and Asia’s latest tech trends.

I also run Jeff’s Asia Tech Class, a podcast and subscription newsletter on the strategies of China / Asia tech companies.

This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.

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