Hi,
Porters Five Forces Model has some major limitations in todays market
environment. It is not able to take into account new business models
and the dynamics of markets. The value of Porters model is more that
it enables managers to think about the current situation of their
industry in a structured, easy-to-understand way as a starting point
for further analysis. Todays markets are highly influenced by
technological progress, especially in information technology.
Therefore, it is not advisable if not to say impossible to develop
a strategy solely on the basis of Porters models. The four factors
identified by Itagaki, Berlin & Schatz take these into account and
present the problems on dynamic systems. The combining of these two
systems however produces a well rounded basis for business, and in no
way are they truly incompatible.
Thanks,
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