Porter’s Five Forces (Deep Dive)
When a few large companies dominate an industry, this force is usually very high.
What is Intensity of Rivalry?
Using the internet to create a competitive advantage, such as an online storefront.
What is E-Business Strategy?
These businesses have a high market share in a slow-growth industry and provide the "milk" (funding) for other units.
What are Cash Cows?
If Apple decides to start making its own car, it is using this type of Corporate Strategy.
What is Diversification?
Developed by Michael Porter, this model suggests that an organization must choose a clear competitive position or risk being "stuck in the middle."
What are Generic Strategies?
This force is high when customers can easily switch to a different type of product that performs the same function (e.g., taking a train instead of a plane).
What is Threat of Substitutes?
A strategy focused on providing excellent support and meeting client needs after the sale.
What is Customer Service Strategy?
These have low market share in a high-growth market; they require a lot of cash to turn into stars.
What are Question Marks?
Walmart’s primary competitive strategy is based on this Porter model.
What is Cost Leadership?
Patents, high start-up costs, and brand loyalty act as these to keep new competitors out.
What are Barriers to Entry?
This "weapon" involves being the first to bring an innovative product to the market.
What is First-Mover Advantage?
These have low market share and low growth; managers usually try to sell or liquidate them.
What are Dogs?
If a local bakery only sells gluten-free, vegan cupcakes to a specific neighborhood, they are using this strategy.
What is Focus Strategy?
This force is strong when an industry relies on a single provider for a raw material.
What is Bargaining Power of Suppliers?
A strategy that emphasizes constant improvement and finding ways to do things better/faster.
What is Quality Strategy (or Six Sigma/TQM)?
These have high market share in a high-growth market and are the company's "shining" future.
What are Stars?
When a company like Netflix analyzes why Disney+ is gaining subscribers, they are performing this part of the SWOT.
What is External Analysis (Threats)?
If a buyer can easily "backward integrate" and produce the product themselves, this force increases.
What is Bargaining Power of Buyers?
Applying biological or environmental sustainability into the core business model.
What is a Green Strategy (or Sustainability Strategy)?
When a "Star" market slows down, the business unit usually transitions into this category.
What is a Cash Cow?
When a manager looks at the "Human Resources" of a company during a SWOT, they are looking at this.
What is an Internal Strength (or Resource)?