Porter’s article discusses his views on how markets work and how companies react to changes

in it. Companies change how they face these problems depending on their specific market, and he
proposes ideas on what affects these changes; the five basic forces. These forces will shape the
strategies of varying firms- how they act accordingly when competition arrives. This is relevant to
economics as conditions of any market change every day, from entry and exit of firms and pricing.
Hence, it is important to know what the new and existing firms should and would do when these
changes occur. In this essay, I will discuss how Porter’s ideas are still applicable to internet companies
of today. I will focus on the three dominating internet companies in Indonesia and how one of them
lost the competition in the market and whether that is a good decision.

Porter discusses five forces that controls the state of competition in the market, namely the
threat of new entrants, which is how new companies that are trying to get in the market of an existing
business line need to overcome barriers of entry, the bargaining power of customers and suppliers,
which discusses how either suppliers are more at an advantage than the buyers or vice versa, the threat
of substitute products or services, which shows how cheap new products with the same quality of
existing ones can make big companies suffer in earnings, and the jockeying between current
contestants, which