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Thirdly, Porter’s five forces model develops three successful and widely-used strategies. They are overall cost leadership strategy, differentiation strategy and focus strategy.

Among them, from my perspective, the most influential one is differentiation strategy. The five forces model put forward the threats of potential new entrants, the rivalry among current competitors and well as the bargaining power of the buyer, all of these exert great pressure on enterprises. They have to do a lot to sustain or acquire more market share and make profits. Differentiation strategy will make them develop some market mix that is different or better than their competitors or hard to be imitated by potential new entrants. Take P&G as the example, P&G always seeks to the disparity among different brands which are dealing with the same product. It put much effort on the function, package, propaganda and other aspects to develop distinctive brand feature and value. For instance, considering different customers may have different pReference to product mix, P&G makes nine market segment and designs nine different brands to meet its customers’ needs. In this way, it is successful realizes its aim to enlarge customer base and retain customer loyalty.

However, during the practice of Porter’s five forces, some companies as well as researchers criticize the five forces model for being too ideal and not so practical. Specifically, the limitations of the five forces model can be shown in three aspects. For one thing, this model can be fully practiced based on the assumption that the company or staff responsible for making strategy has a better knowledge about the whole line; however, it takes a too long time and hardly can be realized. For another thing, Porter’s five forces emphasize the competition among the same line which neglects the fact that competitors also can cooperate with each other. Thirdly, it suggests the scale of an industry is stable; however, market can be enlarged during sustainable development and innovation.　

Core competence will help companies adapt to various markets and it serves as the base for companies to enlarge their business. Besides, core competence can realize those interests that customers value most.

In the short term, a company’s competitiveness comes from the price of existing products or services. In the long term, the competitiveness will shift to the ability to reduce costs as well as meet customer needs more quickly than competitors. (Cynthia & Michael, 1991)

The strategy of developing a company’s core competence aims to make company gain profit, acquire certain market share, establish a good image as well as recognized and well-accepted by publics through its capability of utilizing production factors efficiently. It is a basic competitive power to help companies sustain a stable and high competitive ability over their opponents.

Specifically, the core competence for modern enterprises is a mix of key resources and specialized skills which based on knowledge and innovation. This mix ensures the dynamic balance of competitive advantage for companies in a certain period. 　

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