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Using game theory, they added the concept of complementors (also called "the 6th force"), helping to explain the reasoning behind strategic alliances.

References

Porter, M. (1979) "How competitive forces shape strategy", Harvard Business Review, March/April 1979.

Porter, M. (1980) Competitive Strategy, The Free Press, New York, 1980...

Four forces -- the bargaining power of customers, the bargaining power of suppliers, the threat of new entrants, and the threat of substitute products -- combine with other variables to influence a fifth force, the level of competition in an industry. Each of these forces has several determinants:

The bargaining power of customers

buyer concentration to firm concentration ratio

bargaining leverage

buyer volume

buyer switching costs relative to firm switching costs

buyer information availability

ability to backward integrate

availability of existing substitute products

buyer price sensitivity

price of total purchase

The bargaining power of suppliers

supplier switching costs relative to firm switching costs

degree of differentiation of inputs

presence of substitute inputs

supplier concentration to firm concentration ratio

threat of forward integration by suppliers relative to the threat of backward integration by firms

cost of inputs relative to selling price of the product

importance of volume to supplier

The threat of new entrants

the existence of barriers to entry

economies of product differences

brand equity

switching costs

capital requirements

access to distribution

absolute cost advantages

learning curve advantages

expected retaliation

government policies

The threat of substitute products

buyer propensity to substitute

relative price performance of substitutes

buyer switching costs

perceived level of product differentiation

The intensity of competitive rivalry

power of buyers

power of suppliers

threat of new entrants

threat of substitute products

industrial growth

industry overcapacity

exit barriers

diversity of competitors

informational complexity and asymmetry

brand equity

fixed cost allocation per value added

This 5 forces analysis is just one part of the complete Porter strategic models...

General points of the essay

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