Five Forces Push Back Strategies
As much as Porter’s Five Forces model supports the thorough analysis of external factors impacting the immediate market and competitive environment as much will these five factors have to be addressed in proper counter measures.
Pushing back on the mentiones five forces will have to be the ultimate response and resolution of the Five Forces analysis as a result. Here are some ideas as to how to push back successfully:
Buyer Power
- Reduce reliance on a few customers –new markets & applications
- Understand needs and develop services/relationships for segments that value them
- Develop relationships with Key Accounts
- Create partnerships (often with channels)
- Create barriers to switching –real or implied
Supplier Power
- Create a broader supplier base
- Increase bargaining power with suppliers (higher volume, etc)
- Create partnerships with suppliers
New Entrants
- Close gaps in product range (development or alliances)
- Work with channels to restrict or block
Signal that competitive response will be aggressive
- Reduce expectations of potential new entrants
- Increase customer switching barriers
- Lobby for regulation to restrict entry
Substitutes
- Improve value of product/service relative to substitute
- Build on positions where substitutes less of a threat
- Support industry efforts to counter substitution (lobbying; joint development)
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Author: Jens Thieme
