Yes, internet is a Killer App that many claimed to rendered
Michael Porter's Industry 5 Forces useless. You shld know tat the 5
forces are Porter's reasons to consider when entering an industry.
THere are 2 schoosl of thoughts here, let me talk about the school
that teaches that internet overrides 5 forces briefly
1st Force - Threat Of New
Entrants
With the internet, this threat becomes infintely high, cos anyone,
and i mean anyone can have a business on the internet, there is
nothing much to stop a person entering the industry.
2nd Force - Bargaining
Power Of Buyers
Naturally, as more people go onto internet to set up businesses and
able to reach more consumers, the bargaining power of buyers become
higher.
3rd Force - Bargaining
Power Of Suppliers
Dont even have to consider this as on the internet, you go straight
to your consumers.
4th Force - Threat Of
Substitute Products
With the internet, there will be countless substitute
products.
5th Force - Degree Of
rivalry
WIth anyone able to get into the industry with internet, the
rivalry naturally is a foregone conclusion.
Basically just remember that Internet has broken the traditional
brick and mortar way of doing business. It is now anytime anywhere
24/7 available to anyone with internet access. Thus, to consider 5
forces in whether to enter an industry is no longer useful, instead
there is this theory called the New 5 Forces. Look up in internet
marketing websites or books, you can find it.
