In 1979, Michael E.

Porter published “The Five Competitive Forces That Shape Strategy”, and the world
of strategy has never been the same. Here’s a look at his idea through the lens of nature itself.

Imagine two fire ant colonies living near each other. They are omnivorous in nature and can thus eat
meat, plant seeds, honeydew etc. For the sake of our story let us limit the area within which the ant
colonies operate to 10% of an acre. The resources ants require to survive is limited in the area but
enough to sustain say 20,000 ants. After intense competition over resources and wars over many
generations of queens the ant population would reach an equilibrium at 10,000 (following the laws of
market demand and supply) for each colony.

With the setup in place let us try looking at what would happen if a new queen ant tries to establish her
colony in the area, assuming she also has about 10,000 ants at her disposal.

The new queen would still need the basic resources for the colony to survive and would thus send her
worker ants on expedition trips. The workers would go around unaware of the armadillos, spiders, birds,
lizards and other threats that await, something that has been drilled into the incumbent worker ants
through generations of expedition. Porter talks about something similar when he mentions the unequal
access to distribution channels and incumbency advantages independent of size for incumbent firms.

Now if the new queen still decides to sacrifice her worker ants in order to obtain a food source, she
leaves herself vulnerable to takeover by one of the incumbent colonies. This threat of retaliation is also a
deterrent for her to enter an already established food chain.

That was barriers to entry. Which force should we compare next? Through this exercise is it evident that
Porter’s Five Forces draw conclusions from what we see in nature? By extension do industries work on
principles similar to what governs the survival of species?