Use the 5 Forces Analysis in your Digital Marketing Strategy
A business model is more than just what a company wants and can do. It is a matrix that studies and understands the context and competition in which your organization operates. And the 5 Forces analysis is the tool to define it.
This is a fundamental exercise for the viability of a business. Therefore, we are going to talk to you about how to carry out this analysis, the forces it considers and how useful it is for improving your income.
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It is a study whose full name is “ Porter’s 5 Competitive Forces Analysis ”. Its author, Michael Porter, is a renowned North American economist and expert in competitiveness. With this model I seek to establish a guide to define the business strategy of all types of companies.
What is 5 Forces Analysis?
In a very practical way, Porter proposes to draw up a diagram that understands and analyses the competition in a given company’s sector. He conceives that this competition moves in the form of 5 forces:
Competitive rivalry
Threat of new competitors
Threat of substitute products
Power of suppliers
Power of customers
The 5 Forces analysis is a list of south africa consumer email model that allows us to understand the competitive context in which a company operates.
These forces, of varied origin, embody direct competition (established and emerging rival companies), which is embodied in the design of products and services. Porter therefore called them vertical. On the other hand, he called the forces that a company cannot control (customers and suppliers) horizontal.
Competing companies
Products
Horizontal
Customers
Suppliers
For Porter, these forces affect saas digital marketing plan 2025 a company’s immediate environment in two essential ways:
Your ability to meet the needs of your customers
Your ability to make money
There is an inversely proportional china lists relationship between the number of competitors and profitability: the fewer rival companies you own, the greater your profitability.
When competitors abound, a company needs to strengthen itself internally if it wants to be profitable.