As I’ve seen new technologies in the GenAI space being released over the last few years I have pondered the effect on organisations and decided to take a look at the impacts through the lens of two classical strategy models - Michael Porter’s 5-Forces and Value Chain. As GenAI tools, like Copilot Cowork approach General Availability combined with the maturing of the Agent landscape it will have a dramatic effect on Tasks, Processes and Roles - what does this mean for ogransiations and industries as a whole?
What is it?
If you step back, most organisations still operate on a fairly stable assumption - work is done by people, organised into roles, within a defined structure (e ven though the reality is that there is a complex informal structure beneath it). That assumption sits underneath a lot of our thinking, and I suspect, including Michael Porter’s Five Forces and Value Chain models. What Generative AI is starting to do is put pressure on that foundation. The way I’ve been framing it with clients is:
- Assistants help with tasks
- Cowork-style tools help with processes
- Agents will start to take on roles (See: From Tasks to Processes to Roles) That progression matters because it maps directly onto how organisations actually operate and when you apply that thinking to the Five Forces and Value Chain models, things start to feel less static.
Five Forces
The Five Forces model, developed by Michael Porter in 1979, is a framework for analyzing the competitive dynamics of an industry. It examines five key forces - competitive rivalry, threat of new entrants, bargaining power of suppliers, bargaining power of buyers, and threat of substitutes - to understand strategic positioning. When considering GenAI effects on this model it becomes apparent that it is a question of who has leverage, and how that leverage is changing.
- Threat of new entrants Smaller organisations can now operate with capabilities that previously required scale. Strategy, analysis, content, even parts of delivery can be stood up quickly. → Barriers to entry are lowering in practical terms
- Supplier power Historically, capability sat with vendors. SaaS platforms, consultants, service providers. Now, organisations can build, assemble, or orchestrate more of that capability themselves. → Supplier power weakens unless it is truly differentiated or hard to replicate
- Buyer power Buyers are better informed, faster to evaluate options, and increasingly able to generate alternatives themselves. → Switching costs reduce and expectations rise
- Threat of substitutes AI does not just improve existing solutions. It creates entirely new ways to achieve the same outcome. Often faster and at lower cost. → Substitution becomes more frequent and less predictable
- Competitive rivalry When many organisations have access to similar capabilities, differentiation becomes harder. → Competition compresses around speed, execution, and orchestration Across all five forces, the consistent theme is: AI shifts leverage. It redistributes who can do what, and how easily they can do it and may lead to new, unimagined, strategic threats (e.g. increasing government intervention).
Value Chain
The Value Chain model, introduced by Michael Porter in 1985, is a framework for analysing how organisations create value through a sequence of activities. It breaks the business into primary and support activities to identify where value is added, costs are incurred, and competitive advantage can be developed. The Value Chain starts to shift in a different, but related way from it’s traditional linear model. What I am seeing in practice at the moment is more grounded:
- Organisations start at the supporting activities HR, finance, operations, reporting and communications. This is where the first automation happens
- The impact shows up as efficiency and capacity , e.g. time saved, faster turnaround and reduced reliance on manual work But once you move beyond automating tasks and into processes and roles (decomposing them into software), something more structural happens, the chain has the potential to stop behaving like a fixed sequence and instead:
- Activities can be recombined dynamically
- Work can be triggered by events rather than processes
- Capability can sit inside or outside the organisation without much friction At that point, you are not just optimising the Value Chain, you are starting to deconstruct it into a set of modular capabilities that can be reassembled as needed. The impact on these two models begs questions about what does it mean and what are we going to do about it?
What does it mean from a business perspective?
This is where the future gets a bit uncomfortable and speculative. Because this is less about tools and more about how organisations actually function.
- Structure becomes more fluid Teams are still there, but the work inside them is increasingly decomposed and redistributed across people and systems
- Back office is just the entry point Most organisations start with efficiency. The real impact shows up when that efficiency changes how all work is done
- Supplier and vendor relationships shift If internal teams can build or orchestrate capabilities themselves, traditional SaaS and service models come under pressure
- Execution speed increases, but so does volatility Faster output is useful, but it also compresses decision cycles and increases the risk of moving quickly in the wrong direction
- The boundary of the organisation starts to blur Work increasingly flows across partners, suppliers, and customers. In some cases, it is not clear where one organisation ends and another begins
- The unit of competition starts to change It is less about firm versus firm, and more about how effectively you orchestrate capabilities across a network In reality, once roles start to shift, we will be changing who does the work, how it is structured, and where value is created.
What do I do with it?
Given this is all future facing (not quite here yet but approaching us very, very quickly) You do not need to redesign your organisation tomorrow. But you do need to start looking at it, and your strategy, differently. A few practical ways to approach this:
- Map work at three levels Look at tasks, processes, and roles separately. Different AI capabilities affect each level in different ways
- Start with leverage, not technology Ask where small changes could create disproportionate impact. That is usually where AI will have the most effect
- Use back office as a proving ground It is a safe place to build capability, but do not stop there. Track how those changes could influence customer-facing work
- Revisit key supplier relationships Be explicit about what you still need externally versus what you could realistically bring in-house over time
- Strengthen governance early As work becomes more distributed across systems, clarity on accountability, validation, and risk becomes more important, not less
- Run small, contained experiments The organisations making the most progress are not necessarily the ones with the biggest plans. They are the ones learning quickly from real use cases Porter’s models, while having been around for quite some time, are still useful. They give us a way to think about competition and value that has stood the test of time. But they were built for a world where roles were stable, boundaries were clear, and work was tightly coupled to people - Generative AI is starting to loosen all three. We are not there yet, most organisations are still early but the direction is becoming clearer. It is less about optimising the existing structure, and more about understanding how that structure might evolve.
Further Reading
Porter’s Five Forces in the GenAI Era: Competitive Moats and Strategic Positioning by Dan Clark
Diagram Attributions
5 Forces
By Denis Fadeev - Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=32946157
Value Chain
By Dinesh Pratap Singh - Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=7480725