Are Porter’s Five Competitive Forces still Applicable? A ...

Are Porter s five Competitive Forces still Applicable? A Critical Examination concerning the Relevance for Today s Business Author: Fabian D lken University of Twente Box 217, 7500AE Enschede The Netherlands Abstract, Porter s five Forces model is a powerful management tool for analysing the current industry profitability and attractiveness by using the outside-in perspective. Within the last decades, the model has attracted some criticism because of the developing Internet economy. Due to an increasing significance of Digitalization, Globalization and Deregulation, the industry structure of the Old Economy changed fundamentally. The New Economy is not comparable with the Old Economy , which is the basis of the five Forces model. Moreover the last decades have shown that Information Technology became more and more important.

2.1 The Five Forces model The basis of Porter’s Five Forces is the approach of the industrial organization theory (IO). The IOassumes that the attractiveness of an industry, in which a company operates,is determined by the market structure due to the reason that

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  Report, Industry, Five, Competitive, Five competitive

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