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Researching Your Competitive Marketplace to Gain Advantage By Using Porter’s 5 Forces

Researching Your Competitive Marketplace to Gain Advantage

By Using Porter’s 5 Forces

The small business arena has been in flux for well over a year due to the COVID-19 pandemic.  Huge shortages of products during the early stages and the reluctance of consumers to go out in public.  Many resilient entrepreneurs during the pandemic have become creative in offering deliveries, outside dining, and revamping their inventories.  In this new streamlined economy, small businesses must keep adapting to the changes that are inevitably coming.

A great analyzing tool is “Porter’s 5 Forces” which is a model developed by Michael Porter of the Harvard School of Business.  It looks at five competitive market elements of your business allowing you to fine-tune operational strategies.  

When developing your strategy using these five strategies conceived by Professor Porter the small business owner can develop a superior competitive strategy. 

 Porter’s 5 Forces

Suppliers Bargaining PowerThe characteristics of your supply chain are a big factor in the amount of control that the suppliers have over buyers.  The fewer suppliers the greater control they have over the pricing and distribution of products.  When many suppliers are offering the same type of products and costs for changing to a competing supplier are low, a company can increase its profits by switching vendors.

Buyers Bargaining Power

When buyers’ Bargaining power is high they have numerous buying options. If there are choices limited they have limited power.  When a competitor can supply a product that is identical or a substitute for an existing one at a lower price the buyer has a choice. 

Substitute Threats

During the current pandemic, the supply chain was unable to keep up with demand.  As we all remember many products were not available and substitutions became a standard practice.  Some of those substitutions proved to be better than the ones we were used to purchasing.  

Industry Competitors Rivalry

If a product is generic and there are many competitors in the marketplace each supplier has to determine what makes their product appeal to customers.  Knowing what customer base you are targeting will give you an edge. Quality, low price, distribution method, and services offered are factors to consider.  When competing with a large corporation that has a competitive advantage a small company should offer boutique products that the larger firms are ignoring.  An example is the proliferation of craft breweries.

New Entrants Threat

Barriers to entering a new venture can be high or low depending on the type of organizations are currently holding the dominant market shares. Porter states that economies of scale are an advantage to large enterprises due to their ability to produce on a large scale reducing the cost per unit.

Capital requirements are a factor in the new entry of competitors entering the marketplace.  Production of custom products on a small scale using new technology such as 3D printers creates a niche for small producers.  They can advertise through social media and distribute through online vendors.  There is usually little threat of retaliation by large producers since these are low production items. 

If businesses periodically review Porter’s 5 forces and adjusting their strategies to the changing economic conditions, they will have a competitive advantage over their rivals.


Porter, Michael E. “The Five Competitive Forces That Shape Strategy.” Special Issue on HBS Centennial. Harvard Business Review 86, no. 1 (January 2008): 78–93.

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Critical Data Protection Tips to Keep Your Customers Safe

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Critical Data Protection Tips to Keep Your Customers Safe

Is your business at risk of a data breach? Small businesses are more vulnerable to security breaches than their bigger counterparts. Because small businesses often lack the resources to combat security issues, hackers and identity thieves get away with these crimes far too often. Sadly, a customer data breach could spell the end of your small business. 

Whether your business is the victim of a major cyberattack or a few sensitive documents are stolen out of your recycling bins, a data breach can destroy your reputation, provoke lawsuits, and generate punitive fines. But fear not — here are some great tips from Keystone Business Brokers to keep your customer data safe!

Don’t Neglect Physical Document Security

In the digital age, people have become preoccupied with digital security — and rightly so! Every smartphone, tablet, computer, server, and Wi-Fi connection can give hackers a point-of-entry into your business. But Accusoft notes that it’s easy to overlook the physical security of sensitive data, like those paper records you keep in a filing cabinet in the corner of your office. 

There are a number of steps you can take to ensure your physical documents are kept secure. First, restrict access to paper files with locked cabinets and storerooms. When printing sensitive documents, retrieve your papers immediately and clear the printer archives regularly. It’s also a good idea to establish a policy for how long your documents are kept.

Shredding documents you no longer need is one of the best ways to reduce the risk that someone will mistakenly or deliberately come across them. It’s best practice to destroy all paper documents as soon as they become unnecessary. Instead of wasting valuable time tackling this mundane task yourself, consider outsourcing. 

Secure Your Digital Presence

Your business’ online security is just as important as your offline security. However, protecting your digital presence is a lot more complicated than securing and shredding physical documents. This is why many business owners solicit help from cybersecurity professionals. Whether you’re looking for someone to assess your digital security strategy or you need help complying with legal data protection regulations, talking to a professional is your best bet. 

Beyond this, make sure you take the basic steps to secure your business online. Avast recommends creating strong, unique passwords for each and every account you own and enabling multi-factor authentication whenever possible. It’s also important to encrypt your customer data, especially when it comes to payment information.

Safeguard Your Devices

All of your personal and business devices can offer hackers a doorway into your sensitive data. Be sure to protect all of your devices — smartphones and Wi-Fi routers included — to prevent hackers from gaining unauthorized access. Lifewire suggests that one way to do this is to enable the firewall on your Wi-Fi router and computer. Next, install antivirus software on all of your devices to continuously scan for and stop real-time threats, and keep it updated. Hackers can also gain access to your devices through phishing emails, so make sure you and your employees know how to spot and avoid these.

Get Schooled

As a leader you know the importance of getting as much information as possible when it comes to securing data and business systems. To understand the nuts and bolts of cybersecurity and other areas of IT, consider taking online courses from a reputable and accredited school like Western Governors University, which offers IT degrees. Areas of study include data analytics and cybersecurity, and some programs offer specialized degrees such as cloud computing, as well as cross-discipline degrees such as an MBA in IT management. The great thing about learning online is that you can do so at your own pace and at your own place, allowing you to continue working your own schedule.

Protecting your customer data should be your top priority. After all, data is an incredibly valuable asset that can help you improve your products, maximize your profits, and boost your customer satisfaction. If that data is compromised in any way, you could be facing some serious consequences. Stay on top of data security to protect the longevity of your business.