Why Michael Porter is still very relevant these days
My interest in Michael Porter’s work goes way back to when I was still at the start of my career in finance. I had a manager/mentor - Pedro - who was a former McKinsey consultant and introduced me to Porter’s Five Forces model. It’s elegance and simplicity really hooked me. I could basically apply the model to any company, and the insights were always very interesting and relevant.
Porter deals with competition, and how it affects industry  and company-level profitability. He says that “competition in an industry continually works to drive down the rate of return on invested capital toward the competitive floor rate of return, or the return that would be earned by the economists’ ‘perfectly competitive’ industry”. If a market has tough dynamics - or, we could say, if the five forces are particularly strong in that market -, its companies may have a more difficult going, and thus
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