In the 1990s, Yale School of Management professors Adam Brandenburger and Barry Nalebuff created the idea of a sixth force, “complementators,” using the tools of game theory .
In the Brandenburger and Nalebuff model, complementarities sell colombia whatsapp number data 5 million products and services that are best used in conjunction with a competitor's product or service. Intel, which makes processors, and computer maker Apple could be considered complementarities.
Additional modeling tools are likely to help you complete your understanding of your business and its potential.
A value chain analysis helps companies understand where their greatest productive advantage lies, while the BCG matrix helps companies identify which products are likely to benefit most from increased investment.
Porter as a business strategy
Key points
Porter's Five Forces analysis is an important tool for understanding the forces that shape competition within an industry. It is also useful in helping you adjust your strategy to fit your competitive environment and to improve your profit potential.
It works by looking at the strength of five important forces that affect competition:
Supplier power: the ability of suppliers to drive up the prices of their inputs.
Purchasing power: the strength of your customers to reduce their prices.
Competitive rivalry: the strength of competition in the industry.
Threat of substitution: The extent to which different products and services may be used instead of yours.
The threat of new entry: The ease with which new competitors can enter the market if they see that you are making good profits (and then drive down their prices).
By thinking about how each force affects you and identifying its strength and direction, you can quickly assess where you stand.
Then you can see the strategic changes you need to make to generate long-term profits.
Apply this to your life
Ask yourself what your organization's overall strategy is. How does this affect the decisions you make in your work?
If you are in an organization committed to achieving cost leadership, can you reduce costs by hiring less expensive staff and training them, or by reducing staff turnover? Can you reduce training costs by devising internal plans to share skills and knowledge among team members? Can you reduce expenses by using technology such as Internet-based video conferencing?
If your organization is pursuing a differentiation strategy, can you improve customer service? Customer experience mapping can help here. Can you help foster a culture of continuous improvement and innovation in your team?
And if you're working for a company that has chosen a focus strategy, what knowledge or expertise can you use or develop to add value for your customers that isn't available to broad-market competitors?
