Strategic Business Leader · Competitive forces

Limitations of Porter's Five Forces and the Sixth Force

Updated 11 October 2026 · Fact-checked

The Five Forces model assesses industry attractiveness from rivalry, entry, substitutes, buyer power and supplier power. Its limits are that it is static, industry-focused, assumes competition rather than collaboration and ignores complementors and government. A sixth force, often complementors, is added to fix some of these gaps. Use the critique to qualify your analysis.

Understand Limitations of Five Forces and the Sixth Force

Porter's Five Forces helps you judge how attractive an industry is. It looks at the threat of new entrants, the threat of substitutes, buyer power, supplier power and rivalry between existing firms. Strong forces squeeze profit. Weak forces leave room for it.

The model is useful, but it has limits. In SBL you are expected to show commercial acumen, so you must say what the model cannot tell the board. Examiners reward a balanced view, not a mechanical list.

The main criticisms are:

Static view. It gives a snapshot. Fast-changing markets, such as those hit by digital disruption, can shift in months, so the analysis dates quickly.
Industry focus. It assumes the industry is well defined. Boundaries blur when firms operate across sectors or platforms, and it says little about the strengths of an individual firm.
Competition over collaboration. It treats other parties as adversaries. Alliances, joint ventures, networks and partnerships can create value and are not captured.
Profit is not the only goal. It suits profit-seeking firms. It fits poorly with not-for-profit and public sector bodies.
Hard to measure. The forces are qualitative. Two analysts can reach different conclusions.

Several extensions exist. The best known is the sixth force: complementors. These are firms whose products raise the value of yours. Apps make a smartphone more valuable. Where complementors are strong, demand for your product rises. Where they are weak or missing, it can fall. Some writers instead add government (regulation, tax, subsidies, licensing) or the power of other stakeholders as the sixth force.

In the exam, use Five Forces as a starting point. Then say what the model misses in the given scenario, and suggest tools to fill the gap, such as PESTEL, the value network, scenario planning or stakeholder analysis.

Key rules to remember

The five forces: Rivalry + new entrants + substitutes + buyer power + supplier power; Together they indicate industry profit potential. They do not predict one firm's results.
Sixth force (complementors): Complementors: firms whose products raise the value of your product; Opposite in effect to substitutes, which reduce the value of your product.
Alternative sixth force (government): Government: regulation, tax, subsidy, licensing, trade policy; Often covered by PESTEL. Name the version you use and say why it fits the scenario.
Core limitations: Static + industry-bound + competition-only + profit-oriented + qualitative; A quick memory list. Apply each point to the scenario instead of just listing it.

How to solve Limitations of Five Forces and the Sixth Force questions

Use this method when a task asks you to assess, criticise or extend Five Forces in a scenario.

1Read the requirement. Decide whether you must apply the model, criticise it, or both.
2Briefly apply the five forces to the scenario. Use facts from the case and give a view on each force, not a definition.
3Pick the limitations that fit the case. For a fast-changing market, stress the static view. For alliances, stress collaboration.
4Link each limitation to a specific fact in the scenario and explain the consequence for the decision.
5Add the sixth force or extension that suits the case, such as complementors or government, and explain its effect.
6Recommend other tools to fill the gaps, such as PESTEL, scenario planning, value network or stakeholder analysis.
7Conclude with a clear judgement for the board. Show professional scepticism and a balanced view.

Quickest way: Limit, link, fill

When to use it: Use when time is short and the requirement is a short critique or a few marks for limitations.

Write three limitations that suit the case, one line each.
Add one scenario fact against each limitation.
Name one sixth force or extension that matters here.
Name one tool that fills the gap.
Finish with a one-line judgement on how far the board should rely on the model.

Common mistakes in Limitations of Five Forces and the Sixth Force

Listing criticisms with no link to the scenario.
Students memorise a generic list and write it out.
Fix: Tie every limitation to a named fact in the case and state what it means for the decision.
Dismissing the model as useless.
Students think a critique means rejecting the model.
Fix: Say it is a useful starting point with specific gaps. Give a balanced judgement.
Describing the sixth force as one fixed idea.
Textbooks give different versions, such as complementors or government.
Fix: State which version you use, define it, and show its effect in the scenario.
Confusing complementors with substitutes.
Both sit outside the core rivalry between firms.
Fix: Remember: a substitute replaces your product, a complementor makes it more valuable.
Only repeating the five forces with no analysis.
It feels safe and quick to write.
Fix: Spend most of your answer on application and the gaps. Definitions earn few marks.

Worked examples

Example 1

A streaming company operates in a market where new technology and new entrants appear every year. The board plans to rely only on Five Forces to decide whether to enter a new segment. Discuss the limitations of this approach. (8 marks)

Show the solution

Static view: Five Forces is a snapshot. In a market where entrants and technology change yearly, the analysis may be out of date by the time the board acts.
Industry boundaries: the company competes with games, social media and other forms of entertainment. A narrow industry definition may miss these rivals and the real threat of substitutes.
Collaboration ignored: the company may rely on content partners and device makers. The model treats other parties as threats, so it misses value from these partnerships.
Complementors: devices, broadband providers and content creators raise the value of the service. A sixth force, complementors, would capture this. Weak broadband would lower demand for the service.
Firm-level gaps: the model does not show whether the company has the capabilities to compete in the new segment.
Recommendation: use Five Forces as a starting point. Add PESTEL, scenario planning and capability analysis, and review the analysis regularly.

Answer: Five Forces gives a useful first view but should not be the only basis for the decision. It is static, may define the industry too narrowly, ignores collaboration and complementors, and says nothing about the firm's capabilities. The board should supplement it with PESTEL, scenario planning and capability analysis and update it regularly.

Example 2

Explain what is meant by a sixth force in Porter's model and show why it matters to a mobile phone maker. (5 marks)

Show the solution

Define: a sixth force is an addition to the five forces. The most common version is complementors, which are firms whose products increase the value of your own product.
Government is another suggested sixth force. It covers regulation, tax and trade policy that shape industry profit.
Apply complementors: app developers, accessory makers and network operators make a phone more attractive. If many strong apps exist, demand for the phone rises.
Apply the risk: if app developers move to a rival platform, the phone loses value even though the five forces look unchanged.
Conclude: the maker should manage complementor relationships, for example by supporting developers, as part of its strategy.

Answer: A sixth force is an extra influence on industry profit that the original five forces miss. Complementors are the best known: they make a product more valuable. For a phone maker, app developers and network operators are vital, so losing them could cut demand. The maker should monitor and support these relationships.

Exam tips

Do not just list limitations. Link each one to a fact in the scenario and explain the effect on the decision.
State which sixth force you are using and why it fits the case. Both complementors and government are acceptable if explained.
Use the model as a starting point, then name the other tools that fill the gaps. This shows commercial acumen and earns professional skills marks.
In a digital disruption case, stress the static view and blurred industry boundaries, and suggest scenario planning.
Give a final judgement on how far the board should rely on the model, in clear and concise language.

Practice questions from Competitive forces

Limitations of Five Forces and the Sixth Force in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Limitations of Five Forces and the Sixth Force: frequently asked questions

What are the main limitations of Porter's Five Forces?

The model is a static snapshot and assumes a clearly defined industry. It focuses on competition and overlooks collaboration, and it is qualitative and profit-oriented. It also says little about an individual firm's capabilities.

What is the sixth force in Porter's Five Forces?

The best known is complementors, meaning firms whose products increase the value of yours. Some writers suggest government instead. In your answer, say which version you use and apply it to the case.

How is a complementor different from a substitute?

A substitute meets the same need in a different way and can replace your product. A complementor makes your product more valuable when used together with it. Their effects on demand are opposite.

How does digital disruption weaken the Five Forces model?

Digital change can move industry boundaries and reshape forces quickly. A one-off analysis then goes out of date. Use scenario planning and regular reviews alongside the model.