Question

2. Do you feel that Porter's Five Forces and stakeholder analysis is sufficient to define a strategic direction? Why or why not?

Note: please answer for why or why not as well??

Answer 1

My answer is not. This is because the above mentioned theories are very limited to simple market but if we talk about the comprehensive market then these strategies will not work. Both the theories give an overview about the market condition and industry condition but this is not a detailed analysis. In this current era market is changing very fast and these analyses are limited and that to a specific area. For an example Porter’s Five Forces model which takes about only 5 forces not more than that. An industry or any company cannot be determined only in 5 forces. There are other forces as well. For an example demand in the other country has increased then the company will go profitable. But it is not covered in Porter’s Five Forces Model. This is just an overview not a detailed analysis. You need to have detailed analysis about market, industry, customers, rivalry etc before defining a strategic direction.