Karen, Strategy Specialist at GBC, 2 min read
Did you know that competitive pressures within any industry come from five sources? I’m sure you knew that but did you also know that with StratPlan, you can diagnose the competitive conditions in your industry in under 5 minutes. By far, the most widely and powerful tool used for diagnosing the principle competitive pressures in the market is the five forces model of competition. These include: (1) competition from rival sellers (2) competition from potential new entrants to the industry (3) competition from producers of substitute products (4) supplier bargaining power, and (5) customer bargaining power.
In brief, there are simply three steps when you using the five forces model to determine the nature and strength of the competitive pressures in any given industry.
Step 1. Identify the different parties involved along with the specific factors that bring about competitive pressures.
Step 2. Evaluate how strong the pressures stemming from each of the five forces are i.e. strong, moderate or weak.
Step 3. Determine whether the strength of the five forces, overall, is conducive to earning attractive profits in your industry.
When you use StratPlan in your business, you are empowered to evaluate your five forces of competition in under 5 minutes; making it simple for you adapt your company direction as needed. There are just a few steps when evaluating your five forces of competition using StratPlan…13 to be exact.
- Click Five Forces of Competition Analysis.
- Click Substitute Products
- Select the factors that relate to your industry.
- Click “Add New” and Type in additional factors as needed. Add as many additional factors as you like.
- Click Buyer
- Select the factors that relate to your industry.
- Click New Entrants
- Select the factors that relate to your industry.
- Click Supplier
- Select the factors that relate to your industry.
- Click Rival Firm Factors.
- Select the factors that relate to your industry.
- Review Summary of Five Forces Analysis
That’s it…you’re done! In under 5 minutes.
Here’s how it works…
13 steps. All you need to do is Click Five Forces of Competition, select from the pre-input set of factors or add your own. Here’s a secret too. You don’t even need to click Save to save your plan. StratPlan automatically saves your changes.
P.S. Curious about other features to help in the strategy making process? Go to our useful help videos or send us a message, we’d love to help.
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