I can’t resist retailing the comment that there is an outstanding candidate for the much pursued and discussed “sixth force” (government? complementors?) — and that is “going to jail.” This was an apposite observation made at the time of the Enron affair, pointing to the fact that there are no restraints in the Porter model of competitive forces: the more that a firm can keep the competitive forces at bay, the better! If cheating and foul play can be used, then so much the better — according to the Porter framework. A more refined, yin and yang approach would respect the power of countervailing forces. But going to prison seems to capture the spirit of this critique. Anybody know who first formulated it?

In recent times, I have always completed the industry analysis using Porters Five Forces and then completed the internal analysis looking at the firm’s resources.

However this does raise the question, if you truly have a competitive advantage do you really have any competitors and if you have differentiated your business based on, say, customer service what is the role of the industry analysis?