Explore BrainMass

The Limitations of Porter's Five Forces Model

Consider the limitations of Porter's five forces model discussed in the text. Given these limitations and the rapid pace of change in today's business environment, how useful is this model is assessing the industry environment? Is it really important to analyze the industry? Why or why not?

See the attached file.


Solution Preview

There are several limitations of the Porter's five forces model according to the case study for example; if there is an increase in the industrial complexity, drawing conclusions from the Porter's model becomes even harder; it does not consider the fact that large firms can always change their structure; it assumes that the industrial factors are the primary determinants of the firm profit; and the fact that a firm which competes in many countries around the globe have to be concerned with several industrial structures and analyze them.

Considering the limitations above and the changes experienced in the business environment today which are considered to be rapid, questioning the usefulness of Porter's model ...

Solution Summary

The solution discusses the limitations of Porter's Five Forces Model in assessing industry environment.