Category: Analysis
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Why: We want to inform you about threats in the marketplace because known threats can sometimes disguise in many shapes and forms.
The alignment of vision could save you many decision disputes during the turmoil.
In a flash, here is how you identify some threats!
In Short
Before getting into any market, we want to prepare ourselves to achieve our goal in each venture: product testing, market share caption, press exposure, etc.
We have a great product and also a great team, what to worry about, right?
Well, here are some threats you might want to analyze before making an investment: Porter’s Five Forces. It is a model that identifies 5 competitive forces that shape every industry. It can help you determine the weaknesses and strengths of your e-commerce business against others.
Let’s do this exercise for our IoT intelligent devices business.
- Rivalry among competitors
- numerous competitors
- brand loyalty
- Threat of new entrants
- access to distribution channels
- government policies
- Power of suppliers
- few technology providers
- small production capability
- Power of buyers
- restricted to early adopters
- little information available
- Threat of substitute products
- level of application differentiation
- switching costs are get lower
This recognition of threats helps you tweak the business strategy to better use its resources.
Conclusion
After you know what to expect, enter the new market and venture. You might want to also consider whether your strategy delivers a sustainable win/growth. Just a peek into the topic of sustainability.
Typically, we see the KPI of productivity, where value creation is measured against resource usage. What about the KPI of sustainability? Here are 2 common ones:
- Eco-efficiency = value creation / ecological damage
- Socio-efficiency = value creation / socio-damage
Reading material: If you are interested in hearing about strategic practice, then check this out: What I Didn’t Learn in Business School by Jay B. Barney & Trish Gorman Clifford