Revisiting Porter Five Forces Model: Influence of Non-Governmental Organizations on Competitive Rivalry in Various Economic Sectors
Abstract
This study aims to revisit an influential model in management literature—i.e., Michael Porter’s five forces model. It is used to determine the attractiveness of an industry through—buyers power, competitive rivalry, threat of new entrants, suppliers power and substitution goods. Notwithstanding the acclaim that this model has won, it is now facing mounting criticism due primarily to its limited applicability in ever changing global context. This study critically analyzes the literature available on the subject to bring into limelight the weaknesses of this model. We propose an integrated, comprehensive and updated model that captures effects of all forces including a new force—i.e., non-governmental organizations. We suggest that NGO activism interacts with each force to either ameliorate or reduce its effect on the competitive rivalry of the firms. Strategists, consultants and managers are recommended—based on this updated model—to include NGO activism in their assessment of industry’s attractiveness.
Authors
Anjeela Khurram
Researcher, RITM, University of Paris Saclay, France
Dr. Saad Hassan
Assistant Professor, School of Management, Air University, Islamabad, Pakistan
Dr. Shahzad Khurram
Assistant Professor, School of Management, Air University, Islamabad, Pakistan
Keywords
Porter Five Forces, Government, Strategy, NGOs Activism, Competitive Rivalry