Expansion to Porter's 5 Forces Model.

Expansion to Porter's 5 Forces Model

Andrew Grove, the former CEO of Intel argues that Porter’s five forces has been ignoring a sixth force: the power, vigor and competence of complementors. The sixth force consist basically on companies or entities that offer some product or service in a given industry. This product or service have to be compatible or complementary to the goods or services produced and sold in a certain industry. Moreover this complementors can influence directly to the competitive structure of the industry, it can benefit or hurt the companies that are already competing in the industry. It is important to know that complementary goods offer more value to the costumer together than apart and this union is called complementarity. Complementors and complementary goods do not necessarily increase or decrease the competitiveness of an industry, they merely add another layer to the structural complexity of the competitive environment.

Example: https://strategiccfo.com/complementors-sixth-force-of-porters-five-forces/

An example of complementary goods is the hotdog and the hotdog bun. A normal consumer prefers to eat a hotdog in a hotdog bun. Rarely would a consumer purchase hotdogs without also purchasing hotdog buns, and rarely would a consumer purchase hotdog buns without also purchasing hotdogs. Under the six forces model Porter coined, these two products are complementary.

In the six forces of competition, an example of complementary industries is the tourism industry and the airline industry. When a consumer heads to a tourist destination, he or she often gets there on an airplane. Similarly, whenever a consumer travels on an airplane, that consumer is most likely going to visit a destination which is a part of the tourism industry, such as a hotel or a rental car agency. These two industries are proved complementary by the six forces analysis.

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