Porter’s Five Forces in the Post-industrial Age

Abstract

Economic forces don’t change, but the nature of competition does and has. Business has moved through a series of eras to reach the current one, which has been described as ‘post-industrial’, characterized by increased dynamism, a move to a services paradigm, intangible assets, and hyper-competition. In particular, the increasing number of disruptive products has weakened the very concept of “industry” as a set of business with distinct resources. Porter’s Five Forces Model, a seminal element of the Strategic Management canon that is taught in virtually all business programs, is rooted in the time in which it was conceived - in the industrial era. In this paper we explore the fundamental ways in which business has changed in the post-industrial era, and suggest strategies for teaching an updated Five Forces model in light of those changes.