Taking a Step Back to the Basics — by Dan Lynn

By Dan Lynn

Old is new again. Just because the book or framework or model is old, it doesn't mean it can't be helpful today. In the late 1980s and early 1990s I was introduced to Michael E. Porter and several of his books including Competitive Advantage and Competitive Strategy (to learn more about Michael Porter visit his bio on the Harvard Business School website. In fact, while I was at AT&T during the early 1990s, those books were essentially required reading. I was exposed to Michael Porter's work again during my MBA program. I loved the material but found one model in particular to be incredibly useful, Porter's "Five Forces Model". This is a framework Porter developed to evaluate an industry based on five key forces that impact an industry's structure. These forces include:

industry competitors, buyers, suppliers, the threat of substitutes, the likelihood of new entrants. This framework is extremely helpful when trying to understand an industry's dynamics and attractiveness prior to entering it. So, it's a great tool to use when developing your business plan. It is also a great tool to use once you're "knee deep" into an industry - to help you develop your going forward strategy.

I know you are probably moving so fast that it is hard to find any time for strategy. However, I highly recommend - no matter what industry you are pursuing or how long you've been doing it - that you take a step back and look at that industry within The Five Forces Model. In many respects, it can help you get a birds-eye view of your industry and understand the dynamics that are driving its future.