In this series, I present an analysis of a market research consulting business.
This is in fulfillment of ENT 610- Entrepreneur Creation at the Western Carolina University.
Kindly share your comments
#Entrepreneur Series 1:Porter Five Forces
Dolapo (Porter’s Five Forces)
This was an excellent presentation and there was a significant amount of material to direct my comments. One thing that is always on my mind within (Porter’s Five Forces) is the need to develop a framework for analyzing the threat of new entrants. Every industry is under threat of new entrants, and you highlighted several key concepts to mitigate the damage. These include focusing on niche markets, partnering with existing market players, leveraging innovative technologies, and developing a unique pricing model. I thought these were all excellent choices.
There are various strategies to create barriers to entry and maintain a competitive advantage. Here are few additional approaches to consider and the ones you touched upon in your slide presentation:
1. Economies of scale: Through increased production volume and reduced costs, companies can achieve economies of scale. This can deter new entrants by making it difficult for them to compete on price (You highlighted unique pricing model).
2. Product differentiation: Developing a unique product or service offering. By creating a strong brand identity, it can make it more difficult for new entrants to gain market share (You highlighted niche market).
3. Capital requirements: High upfront costs can serve as a barrier to entry. By investing in advanced technology, infrastructure, or research and development, companies can raise the financial bar for potential new entrants (You highlighted leveraging innovative technologies).
4. Access to distribution channels: Building strong relationships with key distribution partners helps ensure that new entrants face difficulties in accessing the same distribution channels.
5. Legal barriers: Utilize patents, trademarks, and copyrights to protect your intellectual property. This makes it more difficult for new entrants to copy your products or services.
6. High switching costs: Make it inconvenient for customers to switch to a competitor by offering loyalty programs or bundling products or services.
7. Strategic alliances: Form partnerships or alliances with other companies in the industry to create a more formidable competitive front (You highlighted partnering with existing players).
8. Preemptive action: Monitor the market closely for signs of potential new entrants and take preemptive action. These actions can include acquiring a potential competitor, entering new markets, or launching new products or services.
Hi Rob,
Thank you for such in-depth addition. I definitely agree with these valid points and will ensure to add these on. However, because operations is within emerging markets some of these barriers to entry can be adopted with time, while some can be adopted as soon as set up. Many of the mitigating factors I highlighted revolve around the services being offered and the market wherein one is operating out of. Over time as growth happens resources then open up to adopt for high level strategies.
As always, your contributions are always very instructive.
Appreciated!
Dolapo