Previously, companies did not pay much attention about understanding their customers and target audience better or what is known nowadays as market analysis. The competition was limited to a few companies in the market, thus customers sometimes had little or no choice.
But as more and more companies entered the world of business, the competition intensified and it became necessary for every company to understand who they are going to deal with, to satisfy its customers, and meet their needs to ensure their loyalty.
What is meant by the term Market Analysis?
It is a total and comprehensive evaluation of the market related to the company's field of activity, and it is one of the elements of the project's feasibility study, and it may sometimes be a previous, or a subsequent step to break into new markets or develop certain products. This assessment includes several aspects, the most important of which are: Target Market Size, Potential Customer Segments, Competitor Studies.
Importance of Market Analysis:
Well done and thorough Market Analysis has a lot of benefits, such as:
- Improving the quality of products and services offered by your company.
- Improve user experience.
- Come up with an accurate and non-random marketing plan.
- Creating a competitive advantage to outperform competitors and stay in the lead, which is called (competitive analysis).
- A deeper understanding of the desires and aspirations of the target audiences.
- Minimize potential threats and risks.
- Increase company profits. and many more.
In this article, we talk about one of the most powerful strategies in the business world, which is known as the Five Forces Strategy by Michael Porter, a professor at Harvard Business School. It is an easy and effective strategy to analyze and study the environment in which competition occurs and the factors that affect the business environment.
What is Porter's Five Forces Model?
Porter's Five Forces: A model of industry analysis based on the five competitive forces that make up nearly every industry, it is intended to help identify the strengths and weaknesses of the industry in which the company is active. Porter's model can be applied across a wide range of sectors of the economy to understand the level of competition between different firms and how to benefit from it in the long run.
What are these five forces?
1- Competitive rivalry:
Refers to the number of competitors and their ability to undermine the profitability of the company. The greater the number of competitors and the number of equivalent products and services they provide, the lower the bargaining power of the company. Conversely, when the competition is less, the company has a greater ability to charge higher prices and set terms of deals to achieve higher sales and profits.
2- Threat of entrants:
The strength of the company is also affected by the strength of new entrants to the market. The lower the cost to the new competitor to enter the market, the lower the competitive strength of the company and the worse its position in the market.
3- Bargaining power of suppliers:
This factor shows how easy it is for suppliers to raise the cost of inputs, and it is affected by the number of suppliers of goods. The fewer suppliers in the industry, the more the company depends on them. In this case, the supplier becomes more powerful and can raise costs and set the conditions that he wants.
4- Bargaining power of buyer:
The company is influenced by the number and importance of its customers, and a smaller and more influential customer base means that each customer has more power to negotiate for lower prices and better offers.
5- Threat of substitutes:
Companies that produce goods or provide services for which there are no substitutes have a greater ability to increase prices and set appropriate conditions.
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1. Porter’s 5 Forces Analysis Model PowerPoint Template
A clear and clean template that is ideal for creating a flawless proficient Porter Model. This PowerPoint PPT template helps you make specific decisions whether to enter a specific industry, increase capabilities within a specific industry, or develop competitive strategies. In addition to its ability to customize and modify to suit your taste and needs this template also features that provides 22 stunning slides designed according to international specifications, including:
Porter’s five forces assessment: When entering a new industrial sector or starting a new business, it is important to analyze the level of competition in this industry to know your competitors and ensure your company or business has a place among the leading competitors.
Porter’s five forces analysis: By analyzing the competitive advantages and the interrelationship with the market, you will come to an understanding of the strength of both your current competitive position and the position you are considering moving into.
Porter’s five forces model: This slide helps you to determine the intensity of competition and market attractiveness, in addition to identifying the strengths in the business, and this, in turn, will help to understand the strength of the company's current competitive position, and the strength of the position you are looking to reach, thus identifying strengths and avoiding weaknesses.
Not to mention the other 19 exceptional slides we let you discover for yourself to compare the internal working environment with the external environment on a larger scale to plan against potential risks and sudden changes that may occur in the labor market.
Conclusion:
The importance of the forces identified by Porter Model and their instrumental role in shaping any industry cannot be denied. We put at your disposal the winning Porter's 5 Forces Analysis Model Google Slides Template. Use it to analyze the market and learn how to profit, compete fiercely, overcome challenges and go on to achieve more and more success.
