3.8 KiB
Competitive Analysis
Use these lenses to investigate a market and an organization's relative position. Their output is a set of questions, evidence needs, and hypotheses, not a profitability forecast.
Five Forces
Attribution: Michael E. Porter described the framework in "How Competitive Forces Shape Strategy" (1979).
Analyze industry structure by examining rivalry, potential entrants, substitutes, buyer power, and supplier power. Define the market boundary first, then ask for each force:
- Who has choices or negotiating leverage, and why?
- Which costs, constraints, regulation, channels, standards, or relationships shape that leverage?
- What evidence supports the assessment, and what is changing?
- Which relevant complements, ecosystems, or nonmarket factors are outside the model?
The framework helps compare structural pressures and identify questions for further research. It does not determine an industry's or firm's profitability; firm capabilities, timing, regulation, execution, and market definition also matter.
Value-Curve Exploration
Attribution: value-innovation and "Blue Ocean Strategy" tools are associated with W. Chan Kim and Renee Mauborgne.
Map the factors customers use to compare alternatives, then describe how each alternative emphasizes those factors. Challenge the current value curve with four prompts:
- Which factors could be removed because they add little value for the chosen customer?
- Which could be reduced?
- Which could be increased?
- What new factor or combination of factors might be worth testing?
This is an exploratory exercise, not evidence that a new market exists. Validate customer value, cost implications, adoption barriers, and competitive response before acting.
Potential Advantages
An advantage may arise from network participation, switching friction, scale economics, intangible assets, distinctive capabilities, data access, relationships, or another context-specific source. Avoid assigning a categorical durability rating.
For each claimed advantage, ask:
- What mechanism creates value or lowers cost?
- For whom does it matter, and what evidence shows that it affects behavior or economics?
- What would a competitor, supplier, customer, regulator, or substitute need to do to weaken it?
- What investment, maintenance, or dependencies does it require?
- Under which scenarios does it strengthen, weaken, or become irrelevant?
Positioning
Describe a position relative to the alternatives customers actually consider. A useful draft can answer: for whom is the offering intended, what job or problem does it address, which category or frame is relevant, what outcome is promised, and what evidence distinguishes it from alternatives?
A two-axis map can help discuss perceptions, but its axes may omit important dimensions and its placement can reflect analyst judgment. Test the map with customer evidence. Neither narrow nor broad positioning is inherently superior; fit depends on the customers, market, capabilities, and chosen trade-offs.
Competitive-Assessment Artifact
Record enough evidence that another analyst can challenge the result:
- Market boundary, customer set, geography, time context, and alternatives included or excluded.
- Evidence and uncertainty for each relevant force, plus direction of change.
- Complements, ecosystems, regulation, or other material factors the selected framework omits.
- Value-curve hypotheses and the customer or cost evidence needed to test them.
- Each claimed advantage as a mechanism, not a label: who benefits, how value or cost changes, dependencies, counterfactuals, and erosion scenarios.
- Positioning alternatives, supporting customer evidence, and trade-offs.
- Strategic implications framed as options and validation needs, not as conclusions mechanically produced by a framework.