Question

perform Porters 5 force analysis on ADP (Automatic Data Processing, Inc.)

Answer 1

I have been working with strategy development for some time now and can say that Michael E. Porter is certainly someone that I’ve read many informative and helpful texts from. I've used these often and in doing so, the Five Forces model has allowed me to better understand and analyze many different businesses and provide recommendations and strategies to help them build their competitive positions.

I also follow concept of personal branding and will from time to time look at methods we may use to evaluate our personal and professional positions in our own personal plans. I’ve been thinking about this and wonder if anyone has tried to model Porter’s Five Forces Model to their own personal brand and plan and to better understand our competitiveness.

A quick search on-line found thousands of links to Porter’s models, but very little on self-application. It may be the wrong tool, however, I wonder if there is value in using this model to create self-awareness when you are pursuing career advancement, new roles or moving into new ventures.

While my thinking on this is still in its infancy, here are some of the thoughts I have had when thinking about self-application:

Porter’s five forces include:

• Rivalry among existing competitors
• Bargaining Power of Buyers
• Bargaining Power of Suppliers
• Threat of new Entrants
• Threat of new Substitutes or Alternatives

Porter also discusses government as neither good nor bad but does note that it has the ability to help or hinder competitiveness. While I think there is some application with this to the individual, I will leave this notion for the moment.

When you consider these forces and consider the job market for individuals applying for roles, do these forces not also apply? I would think they do in differing ways.

There is intense rivalry among competitors for jobs, having been a hiring manager in the past, I can say I would receive, at times, hundreds of applicants for a role. While these lists could be reduced by removing those not responding to the job requirements, there were generally quite a few still left who could compete for the role.

Depending on the market, the skills of the individual and the needs of the organization, does the bargaining power of the buyer (the organization) or the supplier (the potential employee) have any substantial power over one another.   I’ve been through a few cycles where candidates had much more power to command higher salaries and the opposite of course where organizations had more freedom to pay at lower market rates if there was a slump in the need for those resources.

Organizations are measured on how good they are to work for. Are they not competing for suppliers (potential employees) by offering additional benefits, such as better retirement plans, health care support and a wide range of other offers?

Candidates compete with one another by obtaining formal degrees, professional certifications or demonstrating experience to deliver value to prospective employers.

I think the threat of new entrants and of substitutes or alternatives is interesting. Technology has over the years substituted many human roles through automation as has robotics and this continues to expand.

With regard to new entrants, Every year a new batch of college graduates arrives with enthusiasm abounding and a desire to work hard, impress and grow into new organisations. People change career roles and enter into new jobs all the time. For the long term employees of an organization, how do they analyze their market power against these new entrants in types of these situations?

I suspect this is not a new concept, but I am putting my thoughts out and look for your thoughts and feedback on this.   Has anyone tried this before? Did it work?  

I look forward to hearing more.

Thank you