Porters Competitor Analysis Model
Michael Porters Competitor Analysis Model is a business strategy technique used to rank strategic groups or market segments by their significance to the organization. This technique is based on the idea that a company is at its most competitive in situations where it has the most understanding of its competitors. Porters Competitor Analysis Model is used to analyze and compare the strengths and weaknesses of rival organizations within an industry. It is based on the principles of strategic management, which are concerned with how companies create and sustain competitive advantage. The model helps businesses to better understand their competitors and how they can gain a competitive edge in the industry.
The Competitor Analysis Model consists of five parts:
1. Identify Competitors: It is important to first identify all the competitors in the particular industry. This can be done by looking at public information such as public companies financial statements, industry reports and customer reviews.
2. Analyze Competitors Current Strategies: Once all the competitors are identified, it is important to analyze their current strategies. This includes the type of products and services they offer, their pricing strategy, their market share and their marketing and customer service strategies.
3. Analyze Competitors Resources: It is also important to analyze the resources the competitors have. This includes their financial strength, their technological capabilities, the quality of their human resources, the quality of their products and services and the availability of other resources.
4. Analyze Competitors Strengths and Weaknesses: It is important to assess the strengths and weaknesses of the competitors. This includes looking at their marketing capabilities, their financial strengths, their customer relationship and their responsiveness to change.
5. Analyze Competitors Responsiveness to Change: It is important to analyze the competitors responses to changes in the industry or the environment. This includes looking at how the competitors react to the introduction of new products and services, changes in the regulations or changes in the customer preferences.
The Competitor Analysis Model is used to assess the competition in an industry and to gain insights into how to create and sustain competitive advantage. The model helps managers identify areas where the current competitors may be weak and to develop strategies to gain advantage in these areas. It also helps firms understand the strategies used by their competitors and how they can respond to them. The model can also be used to develop a competitive strategy that takes into account the needs of the customer, the industry trends and the companys strengths and weaknesses.
By using Porters Competitor Analysis Model, managers can better understand their competitive environment, their competitors and the competitive strategies used by their competitors. They can then use this information to develop a competitive strategy that focuses on developing a competitive advantage that is sustainable over time. This model can also be used to identify potential new market opportunities and to develop and implement effective strategies to gain a competitive edge in these markets. The model helps to assess the strengths and weaknesses of the competitors, which can be used to develop effective strategies and to develop a competitive strategy that can be used to gain a competitive edge.
