Evaluating Porter’s Five Forces Model and the Subjectivity of Market Analysis

Evaluating Porter’s Five Forces Model and the Subjectivity of Market Analysis

The Porter’s five forces Model of analyzing the competition of a business is a great tool for any managers wishing to assess the profitability of a market. The model can be viewed as being objective, as it excludes an individual’s or a company’s personal feelings toward the market under review, and only focus on factual information available regarding the state of competition. One may feel that a certain region is good for a new business. This notion may be proved wrong through a research by Porter’s model. However, Daft et al. (2010) argue that the assessment of any environment cannot be objective. I agree with the argument brought forward by Daft et al. (2010), because even when analyzing an environment using Porter’s model, one decides the level of competition based on their own views and feelings. One individual will record competition from a nearby firm as minimal, while a different individual may consider the same nearby firm a big threat.

References

Daft, R. L., Murphy, J., & Willmott, H. (2010). Organization theory and design. Cengage learning EMEA.