 Are you attending to all five competitive forces? One of the most widely used frameworks in business strategy development comes from Michael Porter at the Harvard Business School in the form of Five Forces Analysis. The approach identifies five sources of competitive pressure that companies must analyze and address to be successful in the marketplace. These forces are:
1. Rival Sellers – Those who offer the same product or service as you. 2. Potential New Entrants – Often overlooked and sometimes disruptive. 3. Substitute Products – If you are in the airline business, trains are your competition too. 4. Suppliers – Affect your cost structure, quality, volume, etc. 5. Buyers – Hold bargaining power over you. A thorough competitive analysis examines all five forces surrounding your business to determine if your strategy and your offering are positioned optimally for success. If you are feeling increasing competitive pressure, take a look at the five forces and make sure you are attending to all of them. |