Public Agency External Analysis Using a Modified “Five Forces” Framework

Strategy matters in the public sector as well as in the private sector. Michael Porter's “five competitive forces” (5 Forces) framework (Porter 1979 Porter , M. E. 1979 . “How Competitive Forces Shape Strategy.” Harvard Business Review 57 ( 2 ): 137 – 145 .[Web of Science ®] , [Google Scholar]; 1980 Porter , M. E. 1980 . Competitive Strategy: Techniques for Analyzing Industries and Competitors . New York : Free Press . [Google Scholar]; 2008 Porter , M. E. 2008 . “The Five Competitive Forces That Shape Strategy.” Harvard Business Review 86 ( 1 ): 78 – 97 .[PubMed], [Web of Science ®] , [Google Scholar]) is widely used by private-sector firms to analyze the external environment and specific external forces. Can public agency managers use some version of 5 Forces analysis to effectively analyze the external environments of their programs? What modifications are required for public agency use? The case is made that a version of the 5 Forces framework can be useful when appropriately modified for public agency programs. The public agency version of the 5 Forces framework that is presented specifically considers public agency goals from three perspectives: descriptive, instrumental, and normative. The descriptive focus on autonomy is laid out. Another modification to the standard framework explicitly introduces political influence as an external force. Thus, the modified framework considers and integrates both political and economic external forces. Several significant modifications to Porter's other forces are also proposed and discussed. A number of strategic implications of public program 5 Forces analysis are discussed. The modified 5 Forces framework is illustrated both in terms of autonomy (descriptive level) and social efficiency (normative perspective).