You Have Many Competitors

We typically think of “the competition” as those companies who sell goods and services identical or similar to our own.

However, competition can take many forms.

A simple but powerful tool for understanding where power lies in a business situation is using Porter’s Five Forces.  It’s useful because it helps you understand both the strength of your current competitive situation as well as the strength of a position you’re considering moving into.

Porter’s Five Forces says there are five important forces that determine competitive power in a business situation:

1. Direct Rivalry:  What we typically think of as competitors.
2. Threat of New Entry:  Determined by the ease with which new competitors can enter the market.
3. Substitutes:  Ability of customers to find a different way of doing what you do.
4. Supplier Power:  Ease with which your suppliers can drive up prices they charge you.
5. Customer Power:  Ease with which customers can drive down your prices.

Knowing how these five forces affect your business can help you create and execute an effective growth strategy.


Contact Keith by filling out this form (you’ll get an occasional email too), by calling him directly 770.309.5651, or by sending an email to keith at ignite-revenue dot com.
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