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

RESHAPE THE FORCES IN YOUR FAVOR

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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