Business Planning: 5 Competitive Forces

Video Transcript

"One of the key features of the Porter's five forces analysis in strategic planning is it helps you identify your competition much more broadly than you might ordinarily. Certainly, we all consider our direct competitors what a protocols industry rivalry, but, if we look just at those, we miss four other major sources of competition. One of them is threat of substitutes which are things that are outside of our industry which can be used to substitute for solutions that we offer. Another is the threat of new entrance. Those who aren't currently in the market but, could come in and need to be on our radar screen. Suppliers can also be competitors in the sense that they can offer solutions to what we offer by going directly to our customers. Buyers themselves can also be competitors. So it's important for us to recognize that we have competition in the sense of substitutes for our products that can come from a much broader array than just our direct competitors."