Michael Porter
The most influential strategic theorist of the 1980’s was Michael Porter, who introduced many new strategies and concepts. These include the 5 forces analysis, the value chain, generic strategies, clusters and strategic groups. The most famous and successful strategy was the 5 forces analysis. In this strategy he identified the forces that will determine the organisations strategic environment. This strategy is similar to the SWOT analysis but has a better structure. This strategy is used to enable the organisation to gain a competitive advantage by analysing the competitive rivalry in the market. There are five key forces that can affect an organisation. There is the threat of entrants or potential entrants and Threat of substitutes or potential substitutes. Then both suppliers and buyers pose a risk as they both can hold bargaining power over the organisation and the market. These four forces all culminate into what makes competitive rivalry in the industry. The value chain theory made organisations look at themselves from a customer’s point of view as Porter held the theory that an organisation would only be successful if it added to the industry’s value chain. Therefore the organisation needs to be able to identify what value it is giving to the end user.