Write 7 pages with APA style on One or More Theory of Competitive Advantage. Competitive advantage, however, recognized the economic landscape as prone to creative destruction. The notion of competitive advantage has subsequently come under significant critical examination. While Michael Porter’s five forces model is undoubtedly the most prominent theory, other theories include the VRIN and the evolutionary strategy approach. This research discusses the strengths and weaknesses of Porter’s five-force theory of competitive advantage, ultimately arguing that Porter’s theory is valid in certain contexts.
Michael Porter is one of the seminal theorists in the field of competitive advantage. Porter has examined competitive forces in a variety business context. Porter’s most prominent contribution to the research topic is his establishment of the five forces model. This model specifically argues that the following five forces determine the extent an organization has a competitive advantage: the threat of new competition, the threat of substitute products and services, bargaining power of customers, bargaining power of suppliers, and the intensity of competitive rivalry. Porter (1979) establishes a number of strengths of the five-force theory of competitive advantage. One notable example Porter establishes relates to the wine industry in the 1960s. During this period, Porter indicates that wine distribution expanded for local outlets to national conglomerates. This expansion necessitated the companies to establish complex infrastructures, marketing departments, and supply chain and distribution channels (Porter 1979, p. 5). The central recognition here is that with this increased expansion the industry greatly limited the threat of competition .and reduced the intensity of the competitive rivalry. .