If you’re using the real-time strategic planning model, Porter’s Five Forces are a great framework to apply. You can use it to find out what your product’s or service’s competitive advantage is before entering the market.
Developed by , the framework outlines five forces you have to be aware of and monitor: Threat of new industry entrants: Any new entry into the market results in increased pressure on prices and costs. Competition in the industry: The more competitors that exist, the more difficult it will be for you to create value in the market with your product or service. Bargaining power of suppliers: Suppliers can wield more power if there are less alternatives for buyers or it’s expensive, time consuming, or difficult to switch to a different supplier. Bargaining power of buyers: Buyers can wield more power if the same product or service is available elsewhere with little to no difference in quality. Threat of substitutes: If another company already covers the market’s needs, you’ll have to create a better product or service or make it available for a lower price at the same quality in order to compete. Remember, industry structures aren’t static. The more dynamic your strategic plan is, the better you’ll be able to compete in a market.
