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Article
Publication date: 1 January 2009

Wei Wang and Peter P. Chang

Challenging the suitability of “Porter's five forces” as a guide to strategy and entrepreneurship in China and in the global age at large, this paper aims to present a new…

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Abstract

Purpose

Challenging the suitability of “Porter's five forces” as a guide to strategy and entrepreneurship in China and in the global age at large, this paper aims to present a new “five forcesmodel based on Sun Tzu's timeless strategic wisdom, with entrepreneurship and “collaborative innovation” right at its heart.

Design/methodology/approach

The arguments and the new model are developed, drawing on results from a survey among entrepreneurs and executives operating in China, the direct experience of top entrepreneurs, authoritative information from publishers like the Financial Times and Business Week, the consensus at the 2008 Annual Conference of the World Economic Forum, and Sun Tzu's timeless strategic insights.

Findings

The survey among entrepreneurs and executives operating in China shows that “Porter's five forces” has had little impact on business practice in China. One author, a serial entrepreneur, has considered ren shi qian or three Ps (people, project and penny) as the strategic forces driving his ventures in China. Going beyond the narrow, extremely competitive focus of Porter's model, the new “five forcesmodel, consisting of business purpose, business location, business climate, business organisation and business leader, is shown to determine business success. And, as the central strategic force, business leaders have to embrace entrepreneurship and “collaborative innovation” with their hearts to navigate any challenging economic waters.

Originality/value

Freeing business practitioners and teachers/students from the dogma of “Porter's five forces” established 30 years ago, this paper will help them identify what really determines business success in the new age.

Details

Journal of Chinese Entrepreneurship, vol. 1 no. 1
Type: Research Article
ISSN: 1756-1396

Keywords

Article
Publication date: 2 October 2009

Miguel Hernández‐Espallardo and Elena Delgado‐Ballester

The purpose of this paper is to study whether the effectiveness of innovation in improving a firm's performance varies in different competitive situations and to analyze…

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Abstract

Purpose

The purpose of this paper is to study whether the effectiveness of innovation in improving a firm's performance varies in different competitive situations and to analyze whether the competitive forces act as a motivator or as an inhibitor.

Design/methodology/approach

The paper formulates some hypotheses from the literature review. These hypotheses are tested using structural equation modelling with data collected from 218 manufacturers.

Findings

The findings show that small firms must invest in innovation preferably when competitive forces are more intense. Moreover it is found the positive role that market orientation plays in promoting innovation and performance, no matter the level of the competitive forces.

Research limitations/implications

A decision had to be taken on the range of concepts and the domain used for measuring each concept. For future research the paper suggests considering different types of innovations (e.g. incremental vs radical) to get a more precise explanation of the set of relationships considered in this research.

Practical implications

SMEs have to use product innovation in accordance with their competitive situation. When competitive pressure is low, SMEs should be cautious about exaggerating investments on product innovation, whereas investments in other type of market oriented behaviours could be more productive. On the other hand, firms should focus on innovations based on market orientation when the competitive forces expose them to a harsh environment.

Originality/value

This paper provides a clarification of the reasons that may be behind a positive, a negative, or a non‐significant moderating effect of the firm's competitive forces on the market orientation‐product innovation relationship in small manufacturers.

Details

European Journal of Innovation Management, vol. 12 no. 4
Type: Research Article
ISSN: 1460-1060

Keywords

Article
Publication date: 24 May 2013

James Rajasekar and Mueid Al Raee

Michael Porter's Five Forces Model provides an ideal mechanism and framework to study the Oman telecommunications industry's competitive structure. The purpose of this…

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Abstract

Purpose

Michael Porter's Five Forces Model provides an ideal mechanism and framework to study the Oman telecommunications industry's competitive structure. The purpose of this paper is to use this model to identify the competitive forces that affect it the most.

Design/methodology/approach

This paper is based on empirical research. The data were collected primarily from secondary sources such as published interviews of chief executive officers of the telecommunication companies in Oman, government reports, and Telecommunication Regulatory Authority of Oman (TRA). The authors then used Michael Porter's five forces model to investigate the competitiveness of the telecommunication industry in Oman.

Findings

The analysis shows that the strongest competitive forces in the industry are rivalry among competitors and threat of substitutes. While the threat of entry and power of buyers also having a significant impact, the power of suppliers is of very limited impact. Hence, the five forces model impacts uniformly on all the players in Oman's telecommunication market and have important strategy implications for them all. The results of this analysis are then used as a critical tool to formulate effective strategies for industry players in the face of the changing dynamics of telecommunication services industry in Oman.

Originality/value

This study is one of the few papers that attempted to study the telecommunication industry in Oman in depth. However, this is the first research study that investigated the competitive landscape of this industry using an established framework such as Michael Porter's five forces model. As such, the study brought to light new insights and paradigms in competing in the telecommunication industry in Oman. This study also suggests new strategic directives to the incumbents, new entrants, buyers and suppliers.

Details

Competitiveness Review: An International Business Journal, vol. 23 no. 3
Type: Research Article
ISSN: 1059-5422

Keywords

Article
Publication date: 31 August 2010

Carla Pinto Cardoso, Roger Vaughan and Jonathan Edwards

The purpose of this paper is to reflect on the perceived implications of economic and monetary union (EMU) as a driver for changes in the hotel business environment and…

Abstract

Purpose

The purpose of this paper is to reflect on the perceived implications of economic and monetary union (EMU) as a driver for changes in the hotel business environment and, consequently, on Portuguese competitiveness, in terms of the conceptual framework and methodology adopted and showing the way how it may contribute to help managers and decision makers to effectively manage their competitive strategies.

Design/methodology/approach

The paper adopted and adapted Porter's models (Diamond, Five Forces and Value Chain) as the basis for analysing the implications of EMU upon the hotel business environment (at national, industry and operational level). Those implications are the ones perceived by the stakeholders in that sector: public authorities, trade associations and hoteliers.

Findings

The findings indicated that EMU not only changed the hotel business environment at a national level, but also changed the competitive and operational environment. Nonetheless, as this study found, the hotel stakeholders had relatively different hopes and fears concerning EMU.

Practical implications

The paper offers a conceptual framework sufficiently versatile (regarding the context of the study) which can be used by decision makers or managers as a tool to understand their business environment and, consequently, to cope with potential challenges.

Originality/value

Two of the innovative features of this study are: the triangulation of perspectives on the implications of EMU on hotels and the use of a combination of Porter's models as a suitable tool for studying the implications of EMU in the services sector. This can be useful to service decision makers and managers that seek to cope with the business environment challenges.

Details

Worldwide Hospitality and Tourism Themes, vol. 2 no. 4
Type: Research Article
ISSN: 1755-4217

Keywords

Article
Publication date: 1 November 2006

N. Mohan Das Gandhi, V. Selladurai and P. Santhi

Modelling of sustainable development is essential, as environmental protection is regarded as a top global priority in the twenty‐first century. The basic objective of…

8417

Abstract

Purpose

Modelling of sustainable development is essential, as environmental protection is regarded as a top global priority in the twenty‐first century. The basic objective of this paper is to provide a conceptual framework, named the Four Forces model for diagnosing the process of sustainable development.

Design/methodology/approach

Michael Porter's Five Forces model serves as a starting‐point to derive the Four Forces model. The Four Forces model, which is developed based on Back Casting technique, shows the transformation process from current unsustainable development to future sustainable development through environmental degradation, greening force and greening process. These five major components are related based on cause and effect.

Findings

The paper reveals that a clear understanding of the transformation process and their integration is necessary for successful implementation of sustainable development projects, as the transformation is a continuous process. The Four Forces model is a generic and contribute towards a richer understanding of sustainable development process.

Research limitations/implications

The suggested conceptual model provides a holistic view of sustainable development and does not attempt to provide a detailed, step‐by‐step approach for implementing sustainable development in industries. This paper helps to initiate future studies in this area.

Originality/value

In line with Michael Porter's three generic competitive strategies, this study analysis various greening strategies and greening tools and also recommends the Green Productivity as a better tool for implementing sustainable development in industries. The model can be used as a framework for further development of a practical sustainable development system in industries.

Details

Management of Environmental Quality: An International Journal, vol. 17 no. 6
Type: Research Article
ISSN: 1477-7835

Keywords

Article
Publication date: 10 January 2022

Amanpreet Singh, Prem Chhetri and Rajiv Padhye

The paper models the effect of spatial clustering on various dimensions of inter-firm competitive rivalry among port logistics firms using Porter's five forces model.

Abstract

Purpose

The paper models the effect of spatial clustering on various dimensions of inter-firm competitive rivalry among port logistics firms using Porter's five forces model.

Design/methodology/approach

A survey-based quantitative approach is adopted to collect data from logistics firms, which are directly or indirectly dependent on the Port of Melbourne in Australia. A structural equation modelling (SEM) technique is used to examine the theorised relationships between various dimensions of inter-firm competitive rivalry and the tendency of spatial clustering of logistics firms in the vicinity of Port of Melbourne.

Findings

The results indicate that the inter-firm competitive rivalry increases significantly when logistics firms are spatially clustered. This effect is further augmented when they cluster around the port. Co-location of firms near the port tends to increase “bargaining power of buyers”, whilst indirectly affecting “competitive rivalry” via “threats of substitutes”. This indicates that co-location enhances the bargaining power of buyers through the greater availability of substitute services that in turn promotes competitive rivalry among firms. However, co-location has an insignificant effect on “barriers to entry” and “bargaining power of suppliers”. Low entry barrier thus favours high competitive rivalry among firms. Hence, this paper validates the Porter's cluster and five forces models that confirm the positive effect of port logistics clusters (PLCs) on bargaining power of buyers and indirect effect on competitive rivalry partially mediated through threats of substitutes.

Practical implications

This study provides empirically grounded evidence for firms to evaluate co-location decision choices and help buyers and sellers to devise business strategies to enhance inter-firm competitive rivalry and bargaining power.

Originality/value

This is the first systematic attempt to empirically validate Porter's five forces model in the context of PLC. Furthermore, the conceptualisation of PLC concept both as spatial and functional constructs (i.e. dependency on port) is novel. This study thus has broadened the meaning of cluster from a geographic entity to a more useful functional construct to reflect inter-firm dependencies.

Details

The International Journal of Logistics Management, vol. 33 no. 2
Type: Research Article
ISSN: 0957-4093

Keywords

Article
Publication date: 17 April 2009

The purpose of this paper is to review the latest management developments across the globe and pinpoint practical implications from cutting‐edge research and case studies.

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Abstract

Purpose

The purpose of this paper is to review the latest management developments across the globe and pinpoint practical implications from cutting‐edge research and case studies.

Design/methodology/approach

This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context.

Findings

Since its inception in 1979, Porter's five forces model has been used by countless academics and professionals to describe and analyse competitive forces in business. However, the authors of this article believe that this model is no longer (if it ever was) relevant to strategy development and implementation for entrepreneurs in China. In order to find out if Porter's model had played a part in shaping business practice in the country, Wang and Chang carried out a survey of senior managers and entrepreneurs in China and from overseas.

Practical implications

The paper provides strategic insights and practical thinking that have influenced some of the world's leading organizations.

Originality/ value

The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy‐to‐digest format.

Details

Strategic Direction, vol. 25 no. 6
Type: Research Article
ISSN: 0258-0543

Keywords

Article
Publication date: 13 April 2015

Francis M. Mathooko and Martin Ogutu

The purpose of this paper is to establish the extent to which Porter’s five competitive forces (PFCF) framework, among other factors drive the choice of response…

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Abstract

Purpose

The purpose of this paper is to establish the extent to which Porter’s five competitive forces (PFCF) framework, among other factors drive the choice of response strategies adopted by public universities in Kenya.

Design/methodology/approach

The study design was descriptive and utilized a cross-sectional survey of all the public universities in Kenya by administering a structured questionnaire to the top management team. Additional primary data were collected through observations and interviews. Secondary data were also collected in order to corroborate the data collected from the primary sources.

Findings

PFCF framework influenced the choice of response strategies adopted by the public universities “to a great extent”, the most influence being the threat from new entrants. The influence of the choice of response strategies by PFCF framework was independent of the age and category of the universities. Pressure from stakeholders, changes in government policies and regulations, reforms in higher education, unethical response strategies by some universities and university location also influenced the choice of response strategies.

Research limitations/implications

The study collected data from the top management team only; however, other stakeholders could have given additional information not reported here. Further, the research only considered public universities and not all higher education institutions (HEIs) in Kenya, and was cross-sectional, hence generalization and application of the results over a long time, respectively, may be limited.

Practical implications

The value of this study lies in HEIs achieving a competitive advantage and shaping strategic policy direction in the face of changing environment and global commodification of higher education.

Originality/value

Current public universities in Kenya have adopted a business-like approach in their operations in view of changing environment and have adopted coping strategies. Therefore, understanding the factors that influence the choice of response strategies is important for improvement of quality, efficiency and effectiveness as well as in policy formulation and serve as a guide to strategic management.

Details

International Journal of Educational Management, vol. 29 no. 3
Type: Research Article
ISSN: 0951-354X

Keywords

Article
Publication date: 5 August 2014

Ewan Sutherland

– The purpose of this paper is to consider extending the Porter “five forcesmodel for business strategy to encompass nonmarket actions in the telecommunications sector.

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Abstract

Purpose

The purpose of this paper is to consider extending the Porter “five forcesmodel for business strategy to encompass nonmarket actions in the telecommunications sector.

Design/methodology/approach

The Porter five forces model is reviewed in terms of a heavily regulated sector, examining each force in turn, with examples of the use by market players of lobbying and litigation to affect market outcomes.

Findings

The “five forcesmodel is a useful tool in analysing advocacy, lobbying and litigation by players in a heavily regulated market.

Practical implications

The extension opens the way to research in a number of areas to examine issues of structure and strategy, effectiveness in coupling market and nonmarket strategies.

Originality/value

Business strategy is infrequently analysed in the telecommunications sector and only rarely considers lobbying and litigation. This article provides a framework for such analyses and opens up new areas of research.

Details

info, vol. 16 no. 5
Type: Research Article
ISSN: 1463-6697

Keywords

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