Competitive strategy and strategic agendas. Introduction. Porter’s five forces and strategic analysis, страница 2

The media is shown as highly influential and very much in favour of greater control — in effect to appear as the consumers’ champion. Some consumers would almost certainly welcome greater control but others might be persuaded, perhaps by retailers’ price offensives, that this was a solution in search of a problem.

Besides this ambiguity of attitude, consumers would almost certainly have only an indirect influence via consumer groups putting pressure on government. The resulting picture (mid/late-2000) is one of an industry set against such controls and one where the government has little impelling need to intervene. However, before any lapse into complacency, it has to be stated that this analysis needs to be set in the context of an environment with:

•  Economic expansion (and low unemployment)

•  A Labour governmentnotfacing imminent re-election

Havingexaminedthestakeholderpositions and underlying strategic agendas, it is possible for a company in the industry to systematically set out about influencing these agendas. This can be done using a ‘Stakeholder AgendaAnalysis’picture(seeFigure 3).Thisis in effect, an application of force-field analysis (Lewin, 1935; Grundy, 1998).

The vertical upwards arrows in Figure 3 represent the ‘turn-ons’ (or more technically, the ‘attractors’), whilst the downward arrows represent the ‘turn-offs’ (or ‘repellers’). Using both Figures 2 and 3 we can also test out the stakeholder positions and underlying agendas for any specific strategies to influence key industry players.

In summary, these techniques will help managers to visualize more effectively not only what is going on at industry-level politically but also why and how this can be changed. While managers clearly perform some of this analysis informally and intuitively, the complexity of trying to process these interactions can easily exceed cognitive limits.

Furthermore, Miller’s (1976) law in cognitive psychology suggests that most humans are capable of holding five things in their mind simultaneously, a genius can hold seven, while someone less gifted can manage just three. Stakeholder analysis can easily extend to a large number of stakeholders with complex positionings and even more complex agendas. Figures 1 and 2 help to

Stakeholder analysis can easily extend to a large number with

complex positionings and even more

complex agendas

overcome these constraints by promoting strategic visualization.

Porter’s five forces and strategic analysis

Managers and MBA students are taught to analyse Porter’ (1980) five competitive forces to the extent that they can virtually recite them in their sleep. Beginning typically with the buyers they commonly ask, ‘What is their bargaining power?’ Moving on to entrants, the question ‘What are the major barriers to entry and to what extent do these protect existing players in the industry?’ is considered. Then, ‘What bargaining power do suppliers have and are substitutes a major threat?’ And finally, ‘How intense is competitive rivalry and how is this in turn impacted on by the other four competitive

forces?’

The problem is that Porter’s five forces are depicted largely in the relatively abstract world of micro-economic theory and in a context substantially devoid of human interaction and human psychology. To understand the present relevance of the five forces to contemporary managers, let us apply the ‘Alien Test’. If an alien were to land on Earth tomorrow and decide to enrol immediately for an MBA he might well be perplexed (after observing managers in action) to find a yawning gap between the prescriptive implications of the five competitive forces and what actually appears to drive the behaviour of managers in real corporations. Instead he (or it) might conclude that instead of the competitive forces being the prime mover of externally focused management activity, rather it is the stakeholder agendas themselves. By considering the competitive forces in unison with stakeholder agendas we can show how this void can be remedied.