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Key Question

What are the key market drivers?

Tool Description

Porter’s model is a great check list when starting to describe an industry. It helps you organise your research and, more importantly, provides a good framework in which to present your findings.  

Typical Process

  • Start with top-line list of the main players in each of the 5 boxes
    •   Key competitors
    •   Key suppliers
    •   Key customers
    •   Most likely entrants
    •   Most likely substitution
  • Carry out literature search on the names compiled above
  • Gather all relevant articles in one binder
  • “Lift” most common comments into a word document
  • Organise results into 5 boxes
  • Summarise

Tricks & Tips

  • Keep a good balance between words and data
  • “Force quantification” of words. For example, if you read “customer power is likely to continue growing at broadly the same rate” try and find relevant data and write “customer power is likely to continue growing, keeping price hikes on historical level of 2% p.a.
  • Think about Newton and Archimedes (every proactive force creates its own reactive force) and try capturing both the net effect and the two opposing forces
  • Ground your model in the diagnostic process: what further research would be required to conclude on a given trend?

 

Source: Michael E Porter

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First Published: March 2020