the whole point of competitive strategy is to relate a business, or company for that matter, to its environment.
remember companies diversify through acquisition into various industries, for instance google’s decision to acquire youtube was a new entrant even though no entirely new entry has been created the threat of new entry into a given industry will depend on barriers to entry in that market together with reaction for existing competitors these often come in the form of price wars, advertisement wars or even constant launch of products, something that samsung and iphone seem to be always doing even. the rivalry is often as a result of the companies seeing an opportunity to improve their position or just pressure to do so for instance you can go to college and learn about negotiating and contracting, contract law or product liabilty and pay ridiculous amount of money or you can just learn about at your comfort and pace for less than 20 dollars in say udemy or skillshare.
porter’s five forces is a simple but powerful tool that you can use to identify the main sources of competition in your industry or sector. the first of porter’s five forces looks at the number and strength of your competitors. how much would it cost them to switch from your products and services to those of a rival? this refers to the likelihood of your customers finding a different way of doing what you do.
to use the model, start by looking at each of the five forces in turn, and how they apply in your industry. bear in mind that few situations are perfect – but analyzing your industry using porter’s five forces can help you to think through what you could change to improve your competitive position and increase your profitability. this would suggest that it’s best to use the five forces approach alongside an “inside out” or “resource-based” view of the organization, where competitive advantage is derived from leveraging resources and competences within the organization. this can help you to assess the attractiveness of an industry, and pinpoint areas where you can adjust your strategy to improve profitability. we’re always striving to improve your experience on the platform and we’d love to hear your feedback on some new and existing designs.
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