Critically assess porter’s contribution to strategic thinking

Henry Mintzberg, Abraham Mas execrable and Michael porter ar renowned gurus whose hard uses crimp in left a footprint on direction. Some of their overworks has helped in explaining the success and chastening of big businesses over the past few decades and question marks have been raised in recent years if their work prat dormant be applied to our present environment considering the rapid rise in globalisation and technological innovations.Few of the works done by these management experts have been on significant topics such as leadership, scheme and motivation, exclusively this bear witness will strain on the effort of doorkeeper in elucidating how businesses can get to rivalrous advantage in our growing belligerent environment. The essay aims to assess porters contri andion to the way in which people in an organization think about, assess, go steady, and create the future for themselves and their associates. However, habituated the space functional the essay wi ll except take a detailed ge assert at the most criticised work of Porter and only few of his former(a) works will be described.This essay will be base on previous researches by academics and strategians, and all information should not be judged as accurate but as a springboard since they be mostly based on historical theories. In post to return a grip of the essay it is necessary to highlight the key haggle related to the topic of the essay as either precise hypocrisy can de delusive. To start with, Wit and Meyer (2002) defined strategy in price of organisational objective as a course of action for achieving an organizations purpose.For Kay (1996), strategy is the morning star between the organisations inhering capabilities and its external relationships, describing how it responds to its providers, its customers, its competitors, and the social and economic within which it operates (cited in Boddy, 2002 rapscallion 165). Both definitions argon acceptable but assessin g various strategies is the subject ara of the essay that is why a well defined structure of the essay is required. The first region will introduce Porters works, the major assumptions of volt forces analytic thinking and Resource Based View.The second part will detail the primaeval differences between Porters work and recent works such as RBV to begin with highlighting key areas of debate principally those presented by DAveni, Hamel and Downes. The third part will give a brief evaluation on how Porters work has essential our understanding of Strategy which will help develop a conclusion to the essay. From the eighties, Porter has developed a number of models for businesses on how to gain emulous advantage.Porter developed models such as trey generic wine strategies, tailfin forces depth psychology, Porters diamond and value set up. In his three generic strategies model, Porter (1980b, 1985) identified two fundamental types of competitive advantage namely low cost or dissimilariation (cited in Wit & Meyer, 2002 page 350). He developed a third generic strategy from this called focus and proposed that an organization that hopes to achieve a sustainable competitive advantage essential implement one of the three strategies.This is not the first and the very lowest of Porters works and another model he developed was value chain outline (1985) where Porter argued that it is necessary to examine activities separately in secern to identify sources of competitive advantage (Boddy 2002, page 166-167). The value chain provides a way to identify a libertines sources of differentiation where it results from actual uniqueness in creating buyer value and from the ability to signal that value so that buyers discern it (Toby Harfield, Strategic Management and Michael Porter a postmodernist reading).However, it is five forces analysis that has attracted the most number of criticisms. The model, developed by Michael E. Porter in his have got Competitive Strategy Techniques for Analyzing Industries and Competitors in 1980 (www3) pointed out that the state of competition in an industry is determined not only by the existence of competitors but also by the strength of buyers (customers) and suppliers, by the existence of substitute products or services and by the ability of new competitors to enter the industry which he collectively referred to Porters five forces.However, he argued that whatever the collective strength, the corporate strategists remnant is to find a position in the industry where his or her follow can best defend itself against these forces or can influence them in his favour (Mintzberg et al, pg 61). Thorelli 1977 Masson & Quall 1976 explained that forces mentioned above determine the conduct of firms, which in turn determines firm functioning (Toby Harfield, Strategic Management and Michael Porter a postmodern reading).Although the five forces analysis has become an big device for analyzing strategy the bulk y number of criticisms received consequently led to the development of a different approach called the Resource Based View (RBV). RBV, which has received the highest number of cheering since the evolution of Porters work was first spotted in Wernerfelts bind in 1984 before further development by Rumelt 1984, Barney (1986a 1986b 1988 1991) (power point).RBV explains how a companys resources drive its performance in a dynamic competitive environment (David J. Collis et al, 1995, pg 118-128). The idea hindquarters the development of RBV is to state the importance of resources to gaining competitive advantage over rivals where resources are heterogeneous in nature. In clarifying the prerequisite of resources Barney (1991) explained that a firm resource must be valuable, rare, and imperfectly imitable and substitutable in order to be source of a sustained competitive advantage (cited in Henderson and Mitchell, 1997).However, both frameworks have received appraisals but conflicting ass umptions have been make by both theories which further developed to a greater extent theoretical views. Porter 1980 assumes that understanding the external environment and decision making (or moves) according to the five forces is the primary role of strategy, thus opposing the argument of Barney 1986a who argued that analyzing natural skills and capabilities produces more accurate information on the potential value of strategical resources than does environmental analysis (www2).Barneys argument wasnt wholly accepted by Priem and pantryman (2001 a & b) but argued that Barneys (1991) statement if a resource is valuable and rare, thence it can be source of competitive advantage is necessarily honest if the concepts valuable and competitive advantage are defined in the same terms (cited in Henderson and Mitchell, 1997). It is obvious from this point that Porters assumptions have developed other strategist notions which are cited further.Another underlying assumption made by Por ter is the homogeneousness of firms which revealed that all firms have the same ability to implement the right strategy, which contradicts the basic premise of the RBV that all firms are different and consequently do not have the same ability to implement a given strategy (www1). Even though both theories have been applauded, theorists have not been all told overwhelmed by the five forces analysis and RBV different strategies are still in constant development which they deem useful for our current environment.DAveni (1995) in his word Coping with hypercompetition claimed that no organization can build a competitive advantage that is sustainable in our dynamic environment as any advantage gained is only temporary, therefore companies must actively work to recess their own advantages and the advantages of competitors by employing a new 7Ss framework. IBM is an example mentioned to have suffered from ignoring this approach.Firstly, this view opposes that of Porter and RBV as its st rategy does not believe in a sustainable competitive advantage. Secondly, it can be deduced from DAvenis article that Porters model assumes a relatively static market structure (Porters five forces article www3) by saying that the forces mentioned by Porter such as buyer and supplier power (Five forces analysis) that raises barrier to entry and leadership in price and woodland (three generic strategies) are not enough to guarantee success.Downes (2001) saw a similar argument in his article Beyond Porter where he quoted that Porters theories base on the economic situation in the eighties and the stage was characterised by strong competition, cyclical developments and relatively stable market structures. He condemned the view made by Porter that competitive advantages develop from strengthen the own position within the five forces framework and stated that three new forces namely digitalization, globalisation and deregulation should be taken into mount has the main driver for cha nnelize today is technology.Hamel (1996) also conducted a work on strategy in an article called Strategy as variety where he categorised companies based on their successes into encounter makers, rein in takers and rule breakers. Logically, IBM whose strategy was also questioned by Downes (2001) was tagged as a rule maker because they have shaped their industry but subsequently failed. tagged with rule breakers (the industry revolutionaries) is Dell Computer whose intent is to deliberate the industrial order with the support of the crumbling oligarchy under the weight of deregulation, technological upheaval, globalization and social change.It is evident that Porters five forces analysis is extremely influential in the field of strategic management as it has developed other strategic views and further improved our understanding of strategy. Porters work has been the basis for recent strategic notions and his work has received more criticism than RBV which followed suit. Referring back to the question, Porter has developed numerous strategic frameworks with the most criticised work being the five forces analysis which has the most impact on strategic thinking.His work mystified some(prenominal) strategists because of the one-sided approach of the model where it made certain assumptions such as external environment is the primary role of strategy, homogeneity of firms and market structures are relatively stable. These assumptions led to the development of RBV whose main unit of analysis was the familiar environment. RBV claimed that the key to sustaining competitive advantage is to have resources which are valuable, rare, imperfectly imitable and substitutable.Briem and Butler debated this approach where they said it is the way the concept are defined that determines if it is a source of competitive advantage. Other strategists were not left in the low temperature and they voiced out their criticisms of Porters work. DAveni stated that there is no sustaina ble competitive advantage and market structures are dynamic. Downes claimed that three new forces namely digitalization, globalization and deregulation should be taken into context has the main driver for change today is technology and not just the forces mentioned by Porter.Lastly, Hamel in his article explained that companies can either be a rule taker, maker or breaker. In order to give a valid conclusion to the essay, it is important to reconsider the definition made by Kay (1996) where strategy definition was given has the match between the organisations internal capabilities and its external relationships. It would be correct to state that a successful strategy will take both the internal and external environment into consideration when developing its strategy.It is obvious that neither the five forces analysis nor the RBV has done so in this case none of the theories can be considered capable of achieving competitive advantage but will only be valuable if both approaches are combined. Based on the train of knowledge of this essay it would be interesting to see a strategist which will develop a strategy that will link the internal resources with the external environment.