Business Strategy a Popular Tool Essay

Conclusions

The five forces model is well-designed but it is far from perfect, especially for the manager not proficient in its use. The model is complex and is subject to a fairly steep learning curve. A tremendous amount of data must be collected to use the model effectively, and the analysis needs to be conducted in an objective manner. Many recent criticisms reflect the viewpoint that the model does not apply well to knowledge-based industries. While this indicates a lack of understanding of the model, a manager attempting to analyze the computer game industry for example must be able to effectively translate the model's basic principles and terminology into that industry. This is a complex task, and the risk of relying on models such as five forces is that their surface simplicity leads managers to overestimate the model's usefulness or their own understanding of how the model works.Works Cited:

Grundy, T. (2006). Rethinking and reinventing Michael Porter's five forces model. Strategic Change. Vol. 15 (5) 213-229.

Karagiannopoulos, G.; Georgopoulos, N. & Nikolopoulos, K. (2005). Fathoming Porter's five forces model in the Internet era. Info. Vol. 7 (6) 66-76.

Narayanan, V. & Fahey, L. (2005). The relevance of the institutional underpinnings of Porter's five forces framework on emerging economies: An epistemological analysis. Journal of Management Studies. Vol. 42 (1) 207-223.

Oviatt, B. & Miller, W. (1989). Irrelevance, intransigence and business professors. The Academy of Management Executive. Vol. 3 (4).

QuickMBA.com. (2010). Porter's five forces QuickMBA.com. Retrieved March 20, 2011 from http://www.quickmba.com/strategy/porter.shtml

Sheehan, N. (2005). Why old tools won't work in the "new" knowledge economy. Journal of Business Strategy. Vol. 26 (4) 53-60.….....