Learning about Michael Porter's five-force management theory is an excellent way to improve your business strategy. By doing so, you also learn about Michael Porter, who is currently a professor of management at Harvard University. Michael Porters strategic management theory is the study of how a regional area or company can build competitive advantage and thus competitive strategy. The Porter theory indicates that this can be achieved using five forces.

Michael Porter's five-force model is based on the following five factors: the threat of substitute products, new entrants, the bargaining power of suppliers, the bargaining power of customers and the threat of established rivals. Michael Porters theory notes that these factors all influence the attractiveness of an industry. As these forces decrease overall profitability, the industry is seen as purely competitive and hence unattractive. The reverse is also true. Some academics argue that the model is not practical in nature. However, most business professional agree that the model can be a good guiding point. Here's how it can help you:

1. Make Porters management theory increase your profitability.

2. Use Michael Porter management principles to decrease your competition.

3. Make Michael Porters theory improve your industry standing.

Action Steps
The best contacts and resources to help you get it done

Learn about Michael Porters strategic management theory basics

Strategic management theories are crucial guiding points to help you steer your business. One of the most important theories is that of Michael Porter.

I recommend: ValueBasedManagement.net is a great source of information to learn more about Michael Porter's strategic management theory. Businessballs is another excellent source.

Get information about Michael Porter consultants

Michael Porter theories and consultants can be found all over the Internet. However, finding a good consultant who can advise you about Michael Porter and his management theory can be time-consuming. The following sources should help.

I recommend: Business Coaching is an excellent place to find a consultant who understands Porters theory. Another great source for knowledgeable consultants is Roland Berger Strategy Associates.

Implement the Michael Porter theory in your business

Michael Porters theory can provide you with a solid understanding of how your company stands against your competitors within your given industry. This knowledge is critical for the survival of your business as you need to reach your customers before your competition does. As such, learning to apply the five force principles of porters theory is vital for your business.

I recommend: Articlesbase provides one of the most comprehensive plans to directly show you how to apply Porters theory to your firm. QuickMBA is another excellent source that can guide you.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Michael Porters theories are seemingly straightforward to implement. However, if you feel that you may need assistance, be sure to hire a consultant who has practical business experience and common marketplace knowledge.

Michael Porter theory focuses on several major models. The most practical are Expectancy Theory and Value Chain Analysis. Through Expectancy Theory, Porter codified the major factors that impact an employee's motivation to perform. He stated that numerous factors fuel an employee's efforts to reach an organizational goal, including the expectation that performance will yield positive rewards and that rewards will match effort. Through Value Chain Analysis, Porter defined effective supply chain management, presenting a model which categorizes the activities that form a company's product-delivery system as either Primary or Support activities and showing how they work together to build profit. Both models, along with Porter's more complex Five Forces model, form the heart of Michael Porter's Strategic Management Theory.

In order to properly understand Porter's Leadership Theory, you need to focus on the following information:

1. You need to gain as much knowledge as possible on Porter management theory.

2. You may need to hire a business consultant who is thoroughly comfortable with management theories.

3. You should find tools that allow you to put Porter's theory into action.

Action Steps
The best contacts and resources to help you get it done

Gain a thorough understanding of Porter management theory

Numerous websites provide valuable information about Porter theory. In addition to diagrams and summaries of Porter management principles, you'll find various videos and instructional materials that can help you develop the background knowledge and practical expertise to put Michael Porter's theories to work for your company.

I recommend: Harvard Business Publishing offers a well-produced 13-minute video interview with Michael Porter in which he expounds his Five Forces Theory and discusses his latest article on the topic. (For a link to the article, please see Best Sites to Learn More, at the end of this guide.) The Business Open Learning Archive guides you through Porter's Expectancy Theory, providing a diagram, discussion questions, exercises and tips for applying Porter's theory.

Hire a consultant to help you put Porter's management theory into practice

Consultants with knowledge and experience in the management theory of Michael Porter can guide you in maximizing the benefit of his principles in your own company's unique environment.

I recommend: Inforte, a firm which offers business strategy e-consulting based on the management theory of Michael Porter, has also reportedly been endorsed by Porter himself. Accenture, a firm with offices in 23 states, provides strategy consulting services which can help you put Porter's theories to work to increase your company's profitability.

Look for tools that will help you put Porter theory to work

Widely available online tools and resources can help you more easily implement Michael Porter management principles. Software programs, information and services are some of the valuable resources you'll find for your business.

I recommend: The Institute for Enterprise Architecture Developments (IFEAD) features numerous tools to help you optimize your business strategy. The site also offers Porter's What is Strategy? zipped file for download to help you maximize operational effectiveness. Ten3 offers various e-coaching and e-course materials, including a mini-course in strategic management which covers Porter theory.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Be sure to take advantage of as many online tools and resources as possible to develop a clear understanding of the value that Porter's theory can have for your company.

Management theory of Michael Porter education and training can help business managers see new ways to define competition and implement strategy. Unlike other management theories, Porter bases his theories on research. Using Porter's theories, a business may find new ways to increase profits.

Before you begin looking for educational opportunities, you may find it helpful to identify which of Porter's theories you want to learn more about. Porter offers three main management theories, which you can use together or with other strategies to form the best methods of management for your business.

1. Explore ways to use the five-forces management theory to analyze your competition.

2. Discover how value chain analysis can help you gain the advantage over your competition.

3. Learn how to implement ways to use Michael Porter's theory for generic strategies.

Action Steps
The best contacts and resources to help you get it done

Learn the five forces management theory of Michael Porter

Michael Porter's theory of began with an idea that industry managers needed to change the way they viewed competitive forces. His research found five fundamental concepts that affected profits. While there are pros and cons to Porter's theory, it changed the way managers analyzed competition.

I recommend: ProvenModels provides information on Porter's theory on five forces. It offers graphs and resources to help you understand the technical jargon. MindTools offers ways to use Porter's theory and sells an e-book with education information on the theory.

Find ways to implement the Porter management style of value chain analysis

The value chain component of Michael Porter theory works on the premise that firms can create an advantage when it comes to competition. The value chain provides the necessary activities to make this happen.

I recommend: 12manage provides an overview of this Porter theory. It also provides information on companies implementing Michael Porter theories. Use QuickMBA.com to learn about the value chain strategy. It provides charts and resources to help you better understand the theory. For a more in-depth look at Michael Porter's theory, visit NetMBA.com.

Learn about Porter management from Michael Porter

Whether you want to host a conference or find an event with Michael Porter as a keynote speaker, the Internet can help you find the information you need. Aside from teaching classes at Harvard University, Michael Porter also speaks at conferences, workshops and seminars.

I recommend: Big Speak helps arrange for representatives in the corporate world to speak at conferences, workshops and seminars. It currently handles engagements for Michael Porter. Visit the website for the Institute for Strategy and Competitiveness for information on education and training led by Michael Porter. The website also provides a list of books written by Michael Porter.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Consider reading the books and research papers written by Michael Potter to get in-depth management theory of Michael Porter education and training.
• •  Most colleges and universities offer business strategy classes or business management courses that include education and training on Porter's theories.

Michael Porter firmly believed that a business could succeed, no matter what it's profitability, if the management and employees knew how to determine their niche within the market and find just the competitive advantage.

You might be surprised to know that Michael Porter has enough management theories linked to his name to provide enough content for several guides. The commitment of the key terms within this article are each to a particular Porter theory, rather than various elements of one or two theories.

Action Steps
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Diamond Model

The Diamond Model, also known as the Competitive Advantage of Nations, Determining Factors of National Advantage, or the National Diamond, is Michael Porter's best known management theory. In the Diamond Model, Porter points out four areas of research for a company to determine how it will have the advantage over other businesses within that nation and other nations.

I recommend: Read more about the Diamond Model on 12manage or Themanager.

Seven CEO surprises

Porter recognized seven surprises a new CEO of a company does not expect to accompany his new found authority. His theory, also known as Seven Surprises for New CEOs, includes revelations such as 'You are not the boss' and 'You are still only human.'

I recommend: Find out what the other five CEO surprises are through Value Based Management.

Five Forces Theory

Another of Porter's famous management theories is the Five Forces Theory, in which he believed the determined success of an industry is dependent upon five forces. These forces are supplier power, threat of substitutes, barriers to entry, buyer power and degrees of rivalry.

I recommend: Learn the details of each of the five forces from Businessballs.

Value Chain Analysis

In response to criticisms of his Five Forces Theory, Michael Porter published the Value Chain Analysis. This means of analyzing the strengths of a company helps to determine how that company can get ahead of the competition by empowering those strengths through primary and support activities.

I recommend: Access ProvenModels for more information on Porter's Value Chain Analysis.

Generic Strategies

As a company works to gain a competitive advantage through it's determined strengths, three possible strategies surface. Porter called them 'generic' because he believed they didn't depend on the firm or industry. These three strategies are focus, cost leadership and differentiation.

I recommend: QuickMBA offers more information on Porter's Generic Strategies.

Business cluster

A business cluster (industry cluster, competitive cluster, Porter's cluster or Porterian cluster) is a geographic location that houses interconnected suppliers, businesses, providers and institutions within a given industry.

I recommend: Visit the website for the Harvard Business School Institute for Strategy and Competitiveness or Economic Expert for more information on business clusters.