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Mr. Porter and the New World of Increasing Returns to Scale
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This paper endeavours to espouse a nonconformist stance to the classic economic assumptions of Constant and Decreasing Returns to Scale, and explores the world of Increasing Returns to Scale, within the realms of Strategic Management. It seeks to study Michael Porter's Five Forces Model under the latter assumption which apparently embodies the contemporary internet age and global technological evolution, and juxtaposes it with traditional assumptions. Under refreshed circumstances, the paper attempts to establish how a technology supporting Increasing Returns favourably influences the five forces, providing fillip to a firm's competitive positioning, thereby offering it a substantial strategic advantage over peers.
Keywords
5 Forces Model, Porter, IRS, Technology, Competitiveness.
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- Ajit Prasad is Director at Indian Institute of Management, Lucknow; the paper was written during his stay at SP Jain Institute of Management, Mumbai. The usual organizational disclaimer applies. The author is grateful to contributions made by the student community group in general, and Ms H Pavitra (PGP student at IIM Raipur) in particular, for an earlier draft.
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