Project Fro Garments



1. What are the main criticisms leveled against Porter’s Five Forces model?

      There are some major criticisms of Porter’s Five Force Model. Firstly, the five forces model assumes relatively static market structures so it can’t capture what occurs during periods of rapid change in the environment of an industry and the dynamics of markets. (Today's markets are highly influenced by technological progress which entrants from start-ups so the business models completely change within short times.) Therefore, it is not advisable to develop a strategy solely on the basis of Porters models. It’s also not able to take into account new business models and the dynamics of markets. Next, the five force model provides a good framework for analyzing but they do not really consider issues around implementing changes to reposition for strategic advantage. In addition, there is no indication by Porter of how to assess the relative power of the forces or to determine what counteractions can be taken. The model was also criticized that it lacks of justification. The choice of the five forces appears to be arbitrary and it is not an exclusive or exhaustive list.

2. Explain the differences between the strategies of diversification and differentiation?

      The strategy of diversification is a form of corporate strategy to increase profitability or expand firms' operations through the greater sales volume obtained from new products and new markets. This expansion may be related or not related to the existing business. On the other hand, the differentiation is a strategy to develop products or services (value added) that offers unique (make the different into the products). Then the differentiation can raise their products price. In summary, the strategy of diversity distributes the new product that not attends to add value or feature to the existing products as the differentiation strategy.

3. What is core competency...