Monday, March 5, 2012

Porter's Model Still Relevant? Implications?

There have been two articles over the past month that have questioned the relevance of Porter's five competitive forces and value chain model in the context of all things social. First, Andrew Shipilov questions but ultimately argues that social media does not change the relevance of Porter's forces but more recently, Nilofer Merchant, in Harvard Business Review argues that what she deems the social era (not just social media) does indeed make Porter's model no longer work.

The heart of the question is simply, do companies need to be big to be untouchable?

Merchant explains the social era as being fast, fluid, and flexible, and that gorillas are not the one's being rewarded but rather the gazelles. Prior to the social era, companies had to chase scale to find profit but as it is increasingly easier to quickly shift processes and reach customers through social feedback and marketing channels, it is possible, and even preferable to stay nimble.

I recently read my colleagues blog piece on the recent socent weekend that took place at The Hub Seattle which triggered a question tat I've been working with for years; how can we get more ideas out into the world to be tested so that social change can happen more quickly? The beauty with the social era, is that it is increasingly easier to access the information necessary to take a chance and start a business and the nature of what it takes to be successful rewards those who are nimble, creative, and willing to take risk.

More on this soon.


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