Using the five strategic forces or Porter analysis strategically to your advantage



The strategic forces that shape industry competion and profitability as suggested in a Porter anaysis as part of the strategic review of an industry and the competitors within it ultimately determine profitability. Understanding these forces, their origins and implications for the different competitors are at the center of strategic planning as is how to utilise these in the business' favor in order to keep a competitve advantage over rival businesses and remain profitable.

Using these forces to your advantage can be done in many different ways depending on your indutry and business position within the supply chain. Some initiatives and considerations in dealing with competitive forces and using them in your favour can include:

  -Product diferentiation to help in competing with rival firms in the inustry this may include both product characteistics, quality and associated services. This can also aid in achievening pricing descipline where competition on price is fierce.

  -Supply chain strategy such as verical integration and control of strategic assets to decrease the threat of new entrants to the industry.

  -Increase fixed costs to compete in the industry such as R&D and intelectual property such as the development of patents, this acts a deterant to new entrants

  -Increase level and types of services to customers, aim to keep their needs satisfied by understanding their business. This will foster loyalty and reduce the possibility of customers leaving

  -Increase the channel to market and availability for your products to reduce the likelihood of substiitute products eroding market share.

Position your business to take advantage of weaknesses of other competing firms and turn the strtegic forces to your advantage by using the porter analysis you are bale to anlyse the current position of your firm and industry and support the genration of ideas and a strategic plan to ensure profitability and a competitive advantage for the longer term.


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