Question: Questions Porter's five-factor model provides a structure for analyzing the investment value of an industry or market/submarket, i.e., how profitable the average firm in the
Questions
- Porter's five-factor model provides a structure for analyzing the investment value of an industry or market/submarket, i.e., how profitable the average firm in the industry will be. Using this structure, assess whether each of the five factors is "good", "bad", or "uncertain" news for the retail coffee industry (e.g., Dunkin', Starbucks, etc.). Based on this analysis, how confident would you be in investing in the retail banking industry?
- Why does Porter not include market size and growth rate when determining the profitability of an industry or market/submarket?
- What do you think the right "style" strategy would fit the retail coffee market? What is the risk of pursuing this style?
References
- Reeves, Love, and Tillmans, "Your Strategy Needs a Strategy,"Harvard Business Review, September 2012, 76 - 83.
- Porter, Michael E. (2008). The Five Competitive Forces That Shape Strategy.Harvard Business Review (January), 24-40.
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