MindMap Gallery michael porter competitive strategy
Do you understand what Michael Porter Competitive Strategy is? It is composed of five major forces and their basic structures, three basic strategies, a framework for analyzing competitors, market signals, and competitive actions. Here you can find out what these corresponding contents are, so start learning quickly.
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porter competitive strategy
Five major forces and their basic structures
Threats from potential entrants
Barriers to Entry
economies of scale
Product differentiation
capital requirements
switching cost
Distribution channel
Scale-independent cost advantages
government policy
potential retaliation
ever retaliated against entrants
Have resource advantages
Master the industrial capital operation process
Industrial development is slow
competition from existing competitors
Factors affecting the intensity of competition among existing competitors
There are many competitors or they are equally powerful
Industry growth is slow
High fixed costs or high inventory costs
Lack of differentiation or switching costs
Production increased significantly
Diverse competitors
high strategic interests
exit barrier
Competition methods (common)
price war
advertising war
Threat of substitutes
Characteristics of alternatives
Notable alternatives
Nengzi, the price/performance ratio excludes the original product.
Highly profitable product
Customer price negotiation ability
Eight reasons why customers’ bargaining power has increased
Customers are an important resource for an enterprise
Customers purchase products from the industry that represent a significant portion of their cost or purchase amount
The company's products are not differentiated
Low customer switching costs
Low customer profits
Customers adopt backward integration
The product has no significant impact on the customer’s existing products
Customers fully understand the product
Supplier price negotiation power
Reasons why suppliers have strong bargaining power
High degree of supplier concentration
Suppliers do not have to compete with substitutes
Industry is not the supplier’s main customer
Supplier products are important inputs from customers
Supplier product differentiation or establishing its switching costs
Suppliers exhibit forward integration
Three basic strategies
lowest total cost
Implementation
Improve production equipment and achieve economies of scale
Control production costs, such as R&D/labor costs, etc.
Spend less on sales and service
effect
Barriers to entry that create economies of scale
Always make more profits than your competitors
Less threatened when encountering substitutes
If you encounter a customer with strong price negotiation ability, you can only lower the price to the second lowest, and the company will still make a profit.
Due to multi-faceted cost control, companies have more flexibility to make changes when facing suppliers
Corresponding to the five forces in turn
risk
disuse
Technology is replaced by new technology
be imitated
Experience is imitated
Ignore other
Ignore other aspects of the product
Eliminate the cost of differentiation
Unable to form competitiveness based on other product advantages
Differentiation
Method to realize
Design brand image
Technical features
Appearance features
customer service
Distribution network
effect
Product differentiation erects barriers to entry to ward off potential entrants
Differentiation allows customers to prefer the product and avoid competing with other companies
Differentiation makes customers loyal to the product and gives them an advantage over other companies when faced with substitutes.
Differentiation makes products unique and reduces customer price sensitivity
Differentiated products have deliverable profits, and companies don’t care about suppliers lowering prices.
risk
Differentiation meets low price, no cost advantage
Customers’ desire for differentiated needs declines
imitation of being
focus target
Prerequisites
In selected specific areas, enterprises can show higher efficiency, receive higher benefits, and compete with opponents within a wider range of the industry.
implement
Focus on the lowest total cost
Focus on product differentiation
Focused Goals Product Differentiation Lowest Total Cost
effect
cost
Differentiation
risk
The influence of important companies in the industry
Narrowing the gap with the overall market
Intruded by more refined and focused targets
A framework for analyzing competitors
Analyze your opponents
future goals
method
Analysis of competitors’ direct business objectives
Analyze competitors’ parent company’s business objectives
effect
Determine the opponent's current mentality and possible measures
hypothesis
Types of assumptions
Competitors’ assumptions about themselves
Competitors' assumptions about the industry and other firms in the industry
Hypothetical blind spots
Believe that your hypothesized strengths or weaknesses are correct
Have a certain connection with certain products or product features
Differences in culture, region, country, and differences in perceptions of things
Some habits accumulated over a long period of time
Competitors’ personal opinions on products or product trends
Competitors underestimate or overestimate their competitors
Competitors’ minds are imprisoned by old ideas
Inability to view new things objectively
Strategy in progress
operating mode
A high-profile operating model
Internal operating model of the enterprise
Fragmented operating model
roulette competitive strategy
market direction
product
Property and employee distribution
Product development
Purchase of raw materials
labor resources
Production
Distribution channel
Sale
Marketing
Competition model
profit
market share
social reputation
ability
central competence
Mainly the advantages and disadvantages of enterprises in various fields
Growth ability
Analyzing growth capabilities is based on whether competitors may become stronger or weaker in the future.
Quick response ability
Analyzing your competitor's back-up ability can help you understand the opponent's attack ability when selling you against competitive pressure.
Resilience
Analysis of adaptability can help entrepreneurs grasp the actions of the other party when they change
persistence ability
Analyzing persistence ability is mainly to find out the opponent's ability to fight a protracted war.
Anticipate your opponent's likely reaction
offensive operations
attack possible
Attack ability
Attack power
defensive action
Weak place
taboo places
revenge effect
information collection system
oral written
Information editing
Information classification
Information sorting
information report
market signals
The concept of market signals
Information revealed by competitors in their words or actions can directly or briefly reflect the competitor's policies, goals, intentions, and internal conditions within the company.
The role of market signals
bluff
Reflection of action trends
important market signals
advance notice of action
test
Seize the market
Demonstration
express an opinion
appease
avoid overcapacity
time to announce the action process and results
Discuss the industry openly
Let others develop in harmony with themselves in a certain field
In order to improve the status of the enterprise itself
Misinterpret others in order to improve yourself
make a comforting gesture
cross avoidance
Refers to competitors operating in another area of influence
Defense corporate counterattack against sponsor profile
Restricting the unbridled expansion of large enterprises
fighting brand
warning demonstration
Departure from past goals or industry habits
Competitors' explanations or discussions of their own nature
express behavior and purpose
Discuss the cost and difficulty of new products to paralyze opponents
Make a commitment and represent the determination to develop within the industry
Possible strategies of competitors
How policy changes are initially implemented
Secret Antitrust Litigation
Why you need to identify market signals
Analyzing market signals can help analyze competitors, allowing companies to develop competitive strategies that are more beneficial to themselves.
Resolve signals with reference to the past
reason
Companies intentionally or unintentionally imitate past behavior
Way
Gather competitors’ past actions and signals
process
Determine competitor reactions based on collected information
result
Improve the ability to judge market signals
competitive action
Factors giving rise to competition
industrial instability
Many companies
Industrial development is slow
Corporate goals vary widely
Other relevant conditions
Lack of continuity of trust
Market fragmentation
Industrial structure
competitive action
three situations
Improve your current situation even if your competitors don't cooperate.
Disadvantages: It may weaken competitors' performance, or it may weaken its own performance.
Improvements that can only be achieved if most businesses take action
Consider in detail the impact of actions on all businesses and significant competitors
Analyze the pressure caused by actions on competitors
It will only be effective if competitors do not take improvements
Action challenges occur internally and may not be noticed by competitors
Competitors' assumptions or other factors dictate that they do not care about certain actions
Actions pose no threat to competitors
threatening action
Predicting revenge
What is the probability
when will it come
The impact of retaliation
revenge effect
Can revenge be stopped?
Factors affecting the aftermath of revenge
complex contradiction
Hindsight
Implementation time of retaliation strategy
Imprecise target
defensive action
prevent competition from occurring
slight punishment
Take the heat out of the cauldron
promise
three types
promise to commit to a certain course of action
The promise of tit for tat
Promise not to take a certain action
effect
Deter competitors
Ability to deliver on promises
Commitment conditions
Have basic conditions for executing commitments
Clarify the purpose of the promise and have fulfilled the promise before
cannot be deduced under the influence of certain factors
After making a commitment, some conditions that are beneficial to the enterprise are discovered
Strong committed capital backing
portable cash
Expandability
Strong sales team
Extensive product chain
Cutting-edge scientific research institutions
New product
Other favorable conditions
balance point
The role of balance point
Resolve conflicts among competitors and end vicious competition
The meaning of balance point
Find a balance point as soon as possible to reduce the losses of all parties
The balance point is easy to find
Promote the emergence of a balance point