Dear CEO,
As we approach the second month of the year. I presume your strategy for the year is in place, yes?
Additionally, I assume that you implemented the Porter’s five force analysis?
This as you know, helps you create strategy for profit.
The module is focus on ensuring SME businesses can maximize profit by analyzing five components.
Dear CEO,
- Competition in the industry:
Regardless of the industry, analysing the competitor is important. This year allot of your competitors might have made some changes to have a higher market share.
Dear CEO,
2. Threat of substitute products:
To help place your business in a better position, analyse what other
people in your line of business are doing. Analyse the possibility of your
customer finding substitutes to your product or service. This will allow you
to keep innovating and derive a better strategy.
Dear CEO,
3. Bargaining power of buyers:
The more niched your product and service is, the upper the bargaining
power of your buyers. Analyse the level of power your customers have
and put it into consideration when creating a strategy.
Dear CEO,
4. Threat of new entrance:
Analyse your industry on the bases of
- How easy is it to get in?
- What are the regulations to get in?
- What is the minimum capital to get in?
Conducting these analyses will help you determine the threat of new entrance.
Dear CEO,
5. Bargaining power of suppliers:
You need to analyse the power of your supplier. The fewer suppliers that can serve you, the more power they have over your business. This can help you to plan your stakeholder management more effectively.
The porter 5 force model is useful for analysing where your business is, and how best to create a strategy that will help you maximize your profit.
Dear CEO,
You can
To get professional advice.
Dear CEO,
I hope this adds value to you.
Please drop your thoughts in the comment session.
By Mede Akran (marketing and Communications Expert)
Credits to:
Harvard business review.
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