Reflective piece on usefulness of Porter's Five Forces model.

In the first seminar of the term, I was observing how Porters 5 Forces model (5F) quarter be used to analyse the strategic business can-dos of the European Forestry/ study sector in the post 2004 European Union.

5F is an analytical framework, which allows competitive dynamics to be systematically appraised in assessing existing and future favourableness of markets/industries by analyzing the influence of specific characteristics of each of the five forces(2). Diagram below illustrates the forces and the effects of after-presentation password coupled with my additional insights.

Porters 5 Forces applied to the European Forestry/Paper sector (post 2004 EU)

[Model about here. Extracted and adapted from http://www.quickmba.com/strategy/porter.shtml]

Given that firms profitability is influenced by the profitability of an industry it is crucial to analyse it. I assume that such an audit would follow PESTLE (it provides macro-environmental analysis, which 5F lacks) and pulverisation analyses, and would be done by a company in order to establish whether or not to enter/ verification in an industry. Such tools be useful providing we recognise their limitations.

*The Forces are difficult to quantify and even if I applied a numerical scale to my analysis above, the overall industry stigmatise would be subjective and most likely differ from those of other students in the group, even though we sat in the similar seminar.

*Governments influence although not represented in the model (it assumes a perfect market) may play an important role in some of the more regulated economies, especially in the acceding countries.

*5F in general base on the economic situation in the 80s characterised by strong competition and relatively stable market structures, and is not able to take into account new business models (e.g. strategic alliances) and the dynamics of markets, therefore providing only snapshots of situation in todays dynamic industries.

*It focuses on industry as a...

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