BUS 010 Lecture Notes - Lecture 7: Moe Williams, Market Segmentation, Competitive Advantage
Document Summary
Some have challenged michael porter"s model in that it is too simplistic or flawed. Key issues & challenges criticisms will be explored: In some sectors it can be difficult to get a clear picture of the industry. Defining the industry: this is because the identity of the different players is problematic (producers, customers, suppliers, etc. ) Technological change is also causing boundaries to blur. The key to defining market boundaries is substitutability. One of the main approaches of intra- industry analysis is market segmentation. The segmentation analysis proceeds in 5 stages: While the presence of substitutes reduces the value of a product, complements increase value: michael porter"s model only takes substitutes into account, but not complements. The government has been suggested as an addition to michael porter"s model. If the structural transformation is rapid, the five forces model has limited predictive value. The correct choice of firm strategy may be more important than the correct choice of industry.
