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Jane, US
"The Five Forces model has two basic premises. The first is that the goal of a business is long-term profitability. The second 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."
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Assumption in Porter's 5 Forces
Tom, US
"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." |
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Assumption: Product Markets...
Danny, UK
"There is yet another important assumption in the Porter Model: that firms are competing only in PRODUCT OR SERVICES MARKETS (where firms compete for customers). However firms are actually competing in two markets. The other one being: FACTOR MARKETS(where firms compete for resources). These resources can include a variety of tangible and intangible assets, and even stakeholders such as shareholders-investors, banks-creditors, employees-talent, managers, the media,etc. Often this competition for stakeholders is cross-industry!" |
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