Why Porter’s 5 Forces?
There are many models for competitive analysis such as SWOT analysis through to BCG’s Growth Share Matrix. Porter’s 5 Forces has its critics but since its introduction in 1979 it has been taught far and wide in business schools. Most of the senior executives today were schooled in this framework which helps understand your competitive environment.
Porter’s framework considers the strength of rivals, the threat of newcomers, the threat of substitute products or services, supplier power and buyer power. These 5 forces push and pull an organisation in many different directions. A business that has weak rivals, high barriers to entry, few substitutes, multiple suppliers and high demand for whatever you sell will have a significant competitive advantage and high profit margins. Another business with strong rivals, commoditised products, many substitutes, few but powerful suppliers and customers focused on price will have little competitive advantage and low profit margins.
Lift your head up and look around
We all know what it’s like to walk down the street staring at your phone and not seeing the world around you. Yes? This is analogous for a business ignoring its competitive landscape and position. You don’t look where you are going and you bump into someone, trip on uneven paving, miss the car turning left, forget to collect the coffee you ordered ahead and queue to cross the street but miss your opportunity.
Many management teams and marketing teams look inwards. Call it apathy, busyness or anathema but looking inwards harms growth and ignores changing macroeconomic trends. Unfortunately, when a crisis happens, the level of disruption creates severe competitive pressure for many. This can be in the form of increased proximity of competitors fighting for the remaining spend, less suppliers due to existential challenges and a dearth of customers wanting to buy.
But how do B2B marketers adapt?
As custodians of the marketing strategy, you should already be familiar with market, competitor and customer research methods. Marketers are ideally placed to research and analyse market conditions and plan around them. Where b2c marketers may continue to fight for customers in a downturn and spend vast sums on media and digital advertising, b2b marketers have to be savvy.
Those in B2B services know that purchasing cycles can be extremely long and the list of stakeholders to navigate grows ever longer. The time between initial contact and contract signature varies from months to years. Therefore, we are uniquely placed and have a vested interest in continuity of marketing effort to keep that pipeline flowing. Porter’s 5 Forces will help you identify how critical it is for you to target specific areas and contribute to strategic discussion around business strategy.
Is the force with you?
Evolution may have taken millions of years but Covid-19 achieved business transformation for some in just a few weeks. Management teams and b2b marketers who analysed the situation are comfortably following and flexing a plan to see them through it. Others remain in disarray and the force has very much deserted them as they try to ride out the storm before the tide swallows them whole.
Using analytical, technical and stakeholder management skills, b2b marketers can find and increase competitive advantage. In fact, just sustaining it would be sufficient for many.
Additionally, you don’t have to sit on the board to get your point across (though it helps) but you do need a senior director to listen and influence the board. It’s just as well your ABM programme and lead management support are already giving marketing a stronger voice with the Sales Director your number one fan.
How do I adapt my marketing for advantage?
In conclusion, your competitive analysis could have helped you deal with the initial crisis or to adapt shortly after it began. It is not too late. The worst thing you could do is keep quiet and accept the inevitable when b2b marketers have the skills and tools to contribute to competitive strategy.
See how businesses adapt with Porter’s 5 Forces here https://www.think-beyond.co.uk/porters-five-forces-and-marketing-uncertainty/
