PORTER's Five Forces

We have gone into fair depth in understanding LIKER's Model. It would certainly help us build strong organizations. But there is one aspect we cannot ignore. After all, businesses do not operate in isolation. They are dependent and interdependent on several forces within and beyond their control. In 1980, Michael Porter of Harvard University put forth a model that makes it easy for us to understand the impact of several parameters on our business. Known as PORTER's Five Forces Model, he dwells upon five core areas which help us determine our strengths and weaknesses as a business. This is fairly generic and can be applied to almost any organization.

The Five Forces listed by Porter are:

1) Competitive rivalry

2) Threat of new entrants

3) Bargaining power of suppliers

4) Bargaining power of customers

5) Threat of substitutes

After they have been stated, they look so obvious! I do not think any of these needs elaborate explanation. We all face them every day at work. What is important is to take them seriously and work out clear, specific, actionable?plans to tide over each. In some cases, some of the threats may not be visible. But some day, at an inconvenient hour, they are sure to surface. Proactive thinking, creative vision and a down-to-earth approach are needed to protect ourselves from slipping into the traps of complacence and overconfidence.

There may not be much we can do to change the outside world. But there is a lot we can do inside our organization. Through structured and disciplined use of modern concepts and tools, we can surely gear up to face any challenge manifested by Porter's frightening doomsday pronouncements. LEAN is one of them.

Next week, we shall spend some time on LEAN and its benefits. See you.

Here's the link to last week's article: https://www.dhirubhai.net/pulse/likers-4p-model-closing-picture-sridhar-j?

LEAN MURALI, my mentor in understanding LEAN, has a magnificent mission. His mission is to help one million young professionals become Lean Champions. Towards this, he conducts a weekly one hour online Knowledge Sharing Session where he explains Lean, Six Sigma concepts in a simple manner that is easy follow. He believes that spreading knowledge to hungry minds is no less than donating blood or feeding the poor. This is absolutely FREE and anyone can participate. Those interested in these free live sessions can opt to register through the following link: https://tinyurl.com/freelean. You can also share this link with any of your friends who may be interested and can benefit from it.