The 5 competitive forces that shape strategy

In the previous post, I described some of Prahalad and Hamel’s thinking about core competencies in organizations and how this can influence performance improvement and learning development strategies. Lest you think that an organization’s strategies are purely an “inside-out” affair as a competence-centered model implies, I thought I’d post this interview with  Michael E. Porter, a professor at Harvard University, whose five competitive forces framework  has shaped many modern business strategies.  The five competitive forces include:

  1. The entry of competitors
  2. The threat of substitutes
  3. The bargaining power of buyers
  4. The bargaining power of suppliers
  5. The rivalry among existing players

You can learn more about these forces and how they impact business strategies here.

Why a business video on an instructional design blog?

Why am I posting this on this blog? As noted in the previous post, if you design learning solutions for businesses they have to be connected to business goals and to understand business goals you have to understand the business, including its competitive context. I’m also including this because the video reiterates an issue I mentioned in the previous  post—organizations have to do more to communicate their strategies to their workers to increase their learning and doing capabilities.  As Porter notes, “The purpose of strategy is alignment…{Communication is necessary] so workers can make good choices.”  You don’t get alignment without communication. By familiarizing themselves with the strategies of a business, performance technologists and  learning experience developers can help workers make those good choices.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s