Porter's model: a holistic look at competition to get innovating

A few weeks ago I was in one of the Bridee sessions and they started talking about studying the market our start-ups intended to enter. In the world on digital entrepreneurship, there's loads of talk about "knowing your market" from an audience perspective, but the idea of competition is rarely tackled.

My suspicion is that, at least in the creative, feminine, positive circles I inhabit online "competition" is... a dirty word.

"There's enough for everyone"

That's meant to be the enlightened take on it. And you know what? I am normally dismissive of certain attitudes, but I genuinely like that. I love collaborating much more than competing. As a creative innovator, more often than not my job is helping people with precisely that. If you create something special enough, you'll find your clients and those who don't like it can buy from everyone else. Win-win.

That's why I want to introduce you to the take on competition I saw the other day: Porter's model. Not so that you can go panic about how much is out there already, but for you to accept it as a creative challenge and an opportunity to make your offer and your message more innovative. Deal? Let's do this.

To put it bluntly: this model is meant to help you assess how irresistible your offer is in a specific context.

There's 5 elements to it:

  1. Rivalry amongst existing competitors
  2. Threat of New Entrants
  3. Threat of Substitutes
  4. Bargaining power of Suppliers
  5. Bargaining power of Buyers

If this does not sound sexy to you: high five. It most definitely doesn't sound sexy to me. Here's my (lite) spin on it. If you want the proper, high-brow, intense reflection on this, you can go here. I'm actually going to go ahead and chop the two "bargaining powers" because they are more about pricing strategies than literal competition. Here we go:

The existing rivalry

These are your "equals". The direct competition who are "the same". For example: you are a cinema (surprise!). Any other cinema near you is your rival (whether they are all artsy or super commercial).

The new entrants

These are the newer, more innovative options that compete with you without being the same. They do the same, but through different paths. Say, in the case of the cinema, a new entrant could be Netflix (ha!). It allows your potential clients to watch movies, but it's innovating on how.

The substitutes

These are what felt most interesting to me when I learnt this model. They don't really offer the same as you, but they occupy a similar space. Let's look at the cinema again: here it could be... a late night yoga class. Or the Museum night. Your clients are looking to have some entertainment in the evening. They may consider going to the cinema, or they may consider doing anything else that's available.

How does this affect you?

Do you have these three types of competitors? How can you find a spot they don't threaten? How can your offer be more attractive taking into account these three "forces"?


As usual, you can start a conversation by emailing me and sharing your take on this. And, in a completely unrelated topic, the shop has new pieces in it. If a wall of yours needs some love and you don't plan on putting a shelf on it (substitute threat!) consider starting an Art collection. With the code nola2015 you'll get 20% off. Yay!