strategy

Porter’s Five Forces

1. How is a rivalry between competitors?

The need to understand who is direct competitors are right Now. Not always companies that sell the same product compete directly. Although Working with chocolates, the Cacao Show and Copenhagen, for example, do not Focus on the same target audience. In this context, it is necessary to Understand some points: who are the direct competitors (and how to be better Than them)? How companies are grouped (if there are large groups already formed There may be more power to negotiate with suppliers); their brands are already Consolidated and are admired/respected (is it always good to understand why) ?; What are the competitive advantages of competitors (do they have lower costs, Achieve higher margins, are well located, have high fidelity rates,

2. What are the substitute products and services?

One of the biggest mistakes an organisation can make is to Understand that if the product is innovative, it has no competitor. However Unpublished it may be, if it solves an existing problem, there must already be Other ways, at least in part, of solving the same question. To answer some Point, the organisation need to list other products that may also offer the Same benefit or something similar. An example: a toy entertains and educates a Child. What other products do the same? Books, games, movies and amusement Parks contribute to education or entertain children. Therefore, they can be Considered as substitute solutions to the toy.

3. What is the bargaining power of suppliers?

The organisation depends on a few suppliers - especially if The supply is something rare and difficult to find - it will be at the mercy of Their decisions about prices, deadlines and quality levels. Problems can be Made worse if the supplier chooses to supply (or exclusively) his competitor. More than answering this question, the entrepreneur needs to reflect on how to Have access to excellent suppliers, without relying solely on one or the other.

4. How to avoid/hinder the entry of new competitors?

For a first-time entrepreneur or a small business, it is Difficult to answer this question. However, from the beginning of the business, The organisation have to think about creating entry barriers. Patents, firm (duly registered) trademarks, exclusive contracts and even the precaution for The trade dress must be planned by the entrepreneur to avoid or hinder the Arrival of new competitors in their market.

5. What is the Bargaining power of customers?

At first, this strength made more sense to companies that Sold to a small number of customers, who had significant bargaining power with The company. That is true even today, and it is up to the entrepreneur to seek A solution not to depend on few consumers. On the internet, a single customer Can have enormous bargaining power with a company that sells to millions of Customers if he uses, for example, social networks. In addition to having a Diverse range of clients, we must treat everyone with excellence. After all These analyses, it is necessary to define how the company will position itself Concerning its competitors