Competitive model

The model was originally published in Michael Porter's book, "Competitive Strategy: Techniques for Analyzing Industries and Competitors" in The model is widely used to analyze the industry structure of a company as well as its corporate strategy.

Competitive model

Organizational results are the consequences of the decisions made by its leaders. The framework Competitive model guides and focuses these decisions is strategy. The framework that guides competitive positioning decisions is called competitive strategy. A competitive strategy answers the following questions.

How do we define our business today and how will we define it tomorrow? In what industries or markets will we compete? The intensity of competition in an industry determines its profit potential and competitive attractiveness. How will we respond to the competitive forces in these industries or markets from suppliers, rivals, new entrants, substitute products, customers?

What will be our fundamental approach to attaining competitive advantage low price, differentiation, niche? What size or market position do we plan to achieve?

What will be our focus and method for growth sales or profit margins, internally or by acquisition? The key to strategy formulation lies in understanding and overcoming the system barriers that obstruct the attainment of organizational goals.

Competitive model

An effective strategy recognizes these barriers and develops decisions and choices that circumvent them. This strategy often requires significant capital investment and includes the following options.

Defensive strategy — accepting the industry competitive forces as a given and positioning your organization to best defend against them. Guerilla or niche strategy — minimizing or neutralizing barriers by reducing the size of the playing field and taking an offensive or defensive position in a smaller, more attractive market segment.

Every business has a competitive strategy. However many strategies are implicit, having evolved over time, rather than explicitly formulated from a thinking and planning process. Implicit strategies lack focus. Without a well-defined strategy, organizations will be driven by current operational issues rather than by a planned future vision.

This model provides a process to make your competitive strategy explicit so it can be examined for focus, consistency, and comprehensiveness. A business is defined by the want a customer satisfies when he buys a product or service. What is the purpose of your business?

What is the Competitive Forces Model?

Purpose defines why your organization exists. Its purpose must lie outside of the business itself. For in fact, it must lie in society since business enterprise is an organ of society. There is only one valid definition of business purpose: What results are you trying to achieve to fulfill your purpose and how will you measure success?

Your response describes your organizational vision. What value does your business create for its customers?

Who are your customers and where are they located? Why do your customers purchase your products and services rather than a competitor's? What is your business today?

Use your previous responses to define your business.

BREAKING DOWN 'Porter's 5 Forces'

Your answer will provide the focus needed to make your current operations effective. What are your core competencies? Core competencies are points of leverage for gaining competitive advantage.

They are organizational competencies that are unique to your organization or are performed better than your competitors and make a significant contribution to customer perceived value or create a significant cost advantage.

Organizational competencies are functional capabilities and experience a firm possesses by virtue of the way it integrates and blends the individual skills of its employees and achieves results.The competitive market model as commonly described in textbooks includes a number of assumptions that are thought to be necessary to reach the efficient allocation of .

Porter's 5 Forces is a model that identifies and analyzes the competitive forces that shape every industry, and helps determine an industry's weaknesses and strengths.

The competition model is a psycholinguistic theory of language acquisition and sentence processing, developed by Elizabeth Bates and Brian MacWhinney ().

57 Chapter 5 Competitive Market Model The competitive market model serves as the basis for the two di erent multi-user allocation methods presented in this thesis. The competitive market model as commonly described in textbooks includes a number of assumptions that are thought to be necessary to reach the efficient allocation of .

Porter's 5 Forces is a model that identifies and analyzes the competitive forces that shape every industry, and helps determine an industry's weaknesses and strengths.

Porter's Five Forces Model