Critically Evaluate the Approaches of Michael Porter and Gary Hamel to the Paradox of Markets and Resources. Give Examples of How Changing World and/or Organisational Circumstances Affect a Strategic Leader’s Choice Between These Approaches.
The theories of both Michael Porter and Gary Hamel have changed that way organisations strive for competitive advantage. Their ideas on competitive strategy and management innovation are now seen as essential transformational tools for businesses looking to deliver profitable growth for its stakeholders.
Michael E. Porter is a leading authority on competitive strategy, the competitiveness and economic development of nations, states, and regions, and the application of competitive principles to social problems such as health care, the environment, and corporate responsibility. He is the Bishop William Lawrence University Professor, based at Harvard Business School. (Harvard Business School, 2011)
Michael Eugene Porter was one of the most influential strategists of his decade introducing a number of effective strategic concepts including; 5 forces analysis, generic strategies, the value chain, strategic groups, and clusters. He was a design ‘design school’ strategy theorists, who considered strategy to be a part of a well formed, logical planning process. Michael Porter focused on the economic foundations of competition, principles of strategy, creating and growing a strategy, organising for strategy and strategy and social responsibility.
One of the most important and widely used concepts was his 5 forces framework analysis. This identifies the forces that shape a firm’s strategic environment. Porter’s 5 forces framework helps companies identify the attractiveness of an industry in terms of 5 competitive forces, the threat of entry, the threat of substitutes, the power of buyers, the power of suppliers and the extent of rivalry between the competitors. (Exploring Corporate Strategy, 2012). His concept is similar to that of a SWOT analysis and it shows how a firm can use these forces to obtain a sustainable competitive advantage. All of these factors are measured as high, medium of low. The threat of entry measures how easy it is for a business to enter the
Michael E. Porter is a leading authority on competitive strategy, the competitiveness and economic development of nations, states, and regions, and the application of competitive principles to social problems such as health care, the environment, and corporate responsibility. He is the Bishop William Lawrence University Professor, based at Harvard Business School. (Harvard Business School, 2011)
Michael Eugene Porter was one of the most influential strategists of his decade introducing a number of effective strategic concepts including; 5 forces analysis, generic strategies, the value chain, strategic groups, and clusters. He was a design ‘design school’ strategy theorists, who considered strategy to be a part of a well formed, logical planning process. Michael Porter focused on the economic foundations of competition, principles of strategy, creating and growing a strategy, organising for strategy and strategy and social responsibility.
One of the most important and widely used concepts was his 5 forces framework analysis. This identifies the forces that shape a firm’s strategic environment. Porter’s 5 forces framework helps companies identify the attractiveness of an industry in terms of 5 competitive forces, the threat of entry, the threat of substitutes, the power of buyers, the power of suppliers and the extent of rivalry between the competitors. (Exploring Corporate Strategy, 2012). His concept is similar to that of a SWOT analysis and it shows how a firm can use these forces to obtain a sustainable competitive advantage. All of these factors are measured as high, medium of low. The threat of entry measures how easy it is for a business to enter the
References: Create Advantage. (2011). Resource-based View. Available: http://www.createadvantage.com/glossary/resource-based-view. Last accessed 1st Decemeber 2012. Harvard Business School. (2011). Faculty 7 Research: Michael E. Porter.Available: http://www.hbs.edu/faculty/Pages/profile.aspx?facId=6532. Last accessed 29th November 2012. A focus strategy targets narrow segment of domain of activity and tailors its products or services to the news of that specific segment to the exclusion of others. G.Johnson, K.Scholes and R.Whittington (2012) • Third, a core competence is difficult for competitors to imitate because it is a complex harmonisation of individual technologies and production skills. (The Economist, 2008) The Economist