In order to sustain in the market, you have to know the competitive steps that your rival may take. So, in addition to improvement the business processes, you have to understand competitive character of your business environment.
To gain a deep understanding of a company’s industry and competitive environment, organisation should focus on diagnosing the significant competitive pressures in a market and assessing the strength and importance of each factor in day to day functioning.
The Porter’s five-forces model of competition helps an organisation in analyzing competitive environment.
- Threats of new entrants
- Bargaining power of buyer
- Bargaining power of supplies
- Threats of substitute products
- Competition among rivalry
Understanding of these above factors provide you a complete position of competition in a business environment.