RESHAPE THE FORCES IN YOUR FAVOR
Use tactics designed specifically to reduce the share of profits leaking to other players. For example:
• 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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