Porter's Five Forces
Via Michael Porter’s How Competitive Forces Shape Strategy


Use tactics designed specifically to reduce the share of profits leaking to other players. For example:

• To neutralize supplier power, standardize specifications for parts so your company can switch more easily among vendors. (+) (+) (+)(+)

• To counter customer power, expand your services so it’s harder for customers to leave you for a rival. (+)

• To temper price wars initiated by established rivals, invest more heavily in products that differ significantly from competitors’ offerings.

• To scare off new entrants, elevate the fixed costs of competing; for instance, by escalating your R&D expenditures.

• To limit the threat of substitutes, offer better value through wider product accessibility. Soft-drink producers did this by introducing vending machines and convenience store channels, which dramatically improved the availability of soft drinks relative to other beverages.

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