What problems do managers face in conducting a global Five Forces analysis?
Five force analysis is conducted to carry out the qualitative analysis of the strategic position of a firm (Porter, 2008). The issues that the managers can face are due to different reasons. For example it would be a lengthy process for the managers and could require the allocation of different financial and human resources. The nature of the analysis is qualitative, therefore the analysis of the data acquired through five force model may not be credible if the managers have personal biases in action. Other issues with the model is that it is static in nature. I mean that the managers may use their valuable resources on the analysis with the model but would find out that the business circumstance have changed and hence the finding of the model are no more applicable. Another drawback of the model being subjective is that it cannot be used by the managers to make tactical decisions. It can only be used as a guide and not a decision making tool. I do not think that managers can use this model to define the industry.