May the (Half) Force Be With You
Michael Porter’s Five Forces model just got half-a-force better. From Wikipedia: “Porter’s Five Forces analysis is a framework for industry analysis and business strategy development (that identifies) five forces that determine the competitive intensity and therefore attractiveness of a market.” These Five Forces need to be considered when conducting a SWOT analysis.
Dan McGinn of HBR makes a strong case that one should actually consider an additional “half” factor/force in his blog entry entitled “Michael Porter’s Five (and a Half) Forces”. The additional “half” force is government (policy, regulations, etc.).
Today, we are witnessing two interesting examples of companies/industries where the Half Force is impacting market attractiveness:
- Craft Beer: a $2 per barrel reduction in the federal excise tax on beer; and the legalization of home-brewing (click here to read more). The result of these combined forces stimulated the industry to grow from fewer than 50 breweries in 1976 to more than 2,300 today.
- Automotive: E-car maker Tesla is fighting state and federal laws so they can skip dealerships and sell directly to consumers (click here for more details).
So, may the Half-Force be with you (craft beer), and not against you (Tesla).
As always, we welcome your ideas and comments.