On Competition

On Competition

There are five underlying factors that affect an industry and a firm’s profitability:

    • Threat of new entrants
    • Bargaining power of suppliers
    • Bargaining power of buyers
    • Threat of substitute products or services
    • Rivalry among existing competitors

Power of Information

Providing the right information at the right time to the right people can provide a firm a significant competitive advantage in:

    • Lowering costs
    • Supporting differentiation strategies
    • Extending scope or reach of the firm
    • Fostering new businesses

The Competitiveness of Locations

Locale should play a key role in corporate strategy. Global companies are headquartered and often perform much of their work from headquarters. To compete globally, firms must:

    • Find a unique competitive position
    • Develop and maintain a long-term perspective. Developing and educating new market can take time
    • Don’t market the same way in all countries
    • Innovate and perform core activities in your headquarters
    • Perform non-core activities in other areas to extend your influence

Competitive Solutions to Society Problems


    • A clean environment doesn’t need to increase costs and reduce competitiveness
    • Contamination generally points to sloppy design and poor production processes
    • Improving productivity can reduce pollution, help you to become more efficient, and to better compete
    • Regulations are necessary to motivate innovation

Health Care

    • The threat of malpractice lawsuits unnecessarily increase medical costs

On Competition

Highlights by David Willden