Profile Description
With more competitors it will be difficult to compete and keep prices and margins high.
How this helps you
Learn from your competitors, what they do well. Do not use your competitors’ weaknesses to comfort yourself.
What is it?
Competitors is on of five in Porter’s Five Forces model. This is a useful model to help understand the competitiveness of an industry by looking at 5 key elements:
- The threat of new or substitute products or services
- The bargaining power of customers
- The bargaining power of suppliers
- The threat of new entrants
- Competitive rivalry within the industry
Competition is a major principle in market economies and business. Economic theory on competition started with Adam Smith in The Wealth of Nations linked to the efficient allocation of resources.
How does it relate?
Competition in a business context generally relates to the contest or rivalry between two or more economic groups or entities for territory, resources, success, leadership, customers or profit. It arises when multiple parties aim for something that cannot be shared. Competition causes commercial parties to develop new products, services and technologies. This gives consumers greater selection and typically leads to lower prices for products compared to a situation without competition. Also competition inside a company may occur, aimed at improving a company’s products, services or performance through stimulating performance internally.
Your next Waypoint
Make a short list of things you think you could learn from your competitors. What do they do differently to make them successful? And you can read more on Porter’s Five Forces model via wikipedia.org/Porters_five_forces_analysis
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