The paper "The Impact of Electronic Commerce on Corporate Strategic Planning in the Economic Environment" is a worthy example of an assignment on macro and microeconomics. Michael Porter is arguably one of the most recognized economists of modern times. His theories in strategic management, five forces, and Porters' generic strategies have influenced strategic management in diverse ways. However, his views and theories have been criticized by some scholars on the applicability of the model in a range of markets and in a changing global market currently dominated by information technology and specifically digital economy.
On the other hand, Porter is adamant that his theories on how firms can develop their profitability are still relevant. I believe that Porter does not fully acknowledge the role technology has in the modern world but his theory is still relevant. Porter’ s ideas are largely based on economic laws which are still relevant. The law of demand and supply as suggested by Porter are still relevant in all industries irrespective of the technology in use. Larry Downes, one of Porter's main critics, acknowledges that one of the greatest strengths of Porter's model is the sound economic basis.
Nonetheless, Downes clearly states that the model was developed in the ’ 80s a period that presented a different economic environment compared to now (Recklies 2001). The 80’ s economic environment was dominated by stability and high government regulations. Porter did not factor in how dynamic changes in the economic environment would affect firms. In his views, Porter argued that firms are required to assess their five forces and take a position in the industry based on this. This position cannot be changed frequently at least not until 4-5 years.
The digital economy does not support this. Porter’ s theory of the industry is still relevant as no single theory can discredit what he stands for. The fact that the theory has been criticized does not make it invalid or dead. Nonetheless, the theory is in need of being redeveloped to take stock of the current market environment dominated by dynamism.
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