PESTEL and Porter’s 5 Forces
Industry analysis is a core part of strategy. Think of Michael Porter’s iconic 5 Forces framework. Yet, we can all agree that the world is changing and fluid. Twenty years ago, would any of us have thought:
- Disney would broadcast their own movies and shows (Disney+)
- United Healthcare (insurance company) would be the largest employer of physicians (Minute clinics)
- We keep our personal photos outside of our house (Google photos)
- We would vacation at other people’s houses (Airbnb)
McKinsey podcast interview here, on this topic.
Frameworks are useful, and overly simple
In school – yes, I teach in school – we use frameworks to simplify the story. When you are cooking, you need to break things into pieces, then put them back together again, right?
Learn a little selfishly; ask tough questions
As with any liberal arts education, we need to get good at asking tough questions:
- When does this apply? When does it not make sense?
- What’s the limitation of this framework?
- What can I takeaway from this?