The Porter’s Five Forces Model has been around for decades and has been a useful construct for doing traditional industry analyses. Fundamental to the model’s long-standing effectiveness is the “MECE” (Mutually Exclusive Completely Exhaustive) nature of the forces. Basically, each of the forces can – more or less – be analyzed in isolation and then the totality of the competitive environment can be viewed taking these forces into overall consideration.

However, management consultant, Larry Downes, suggested in his article “Beyond Porter” (which expanded the forces to 8), Porter’s was a model for its time but became insufficient over the last decade. Porter’s 5 forces lacked an appropriate ability to assess information technology – a major force agreed by both academics and business thought leaders. It was also widely viewed as lacking appropriate dynamism (i.e., usefulness in a rapidly changing industry). As such, Downes added the additional forces of Globalization, Digitization and Deregulation. You can find commentary on these new forces here.

http://larryonbusiness.blogspot.com/2012/02/business-growth-downes-three-new.html

I’m going to posit that it is again time to refine the model to more accurately cover salient forces in today’s competitive and dynamic business environment. Continue reading →