How familiar are you with Porter’s Five Forces? It’s an excellent model for analyzing your companies market position and strategy.

It helps you understand:

📉 New Competitors: How easily can new players join your game?
📉 Supplier Power: Can your suppliers dictate terms, or are you in control?
📉 Customer Power: Are your customers loyal, or always looking for a better deal?
📉 Substitute Threats: Could a new product make yours obsolete?
📉 Competitive Rivalry: How cutthroat is your industry?

Let me give you an example to make this easier 👇🏻

Netflix uses this framework to stay ahead:

✅ They make it hard for newcomers by investing big in original content (Battling New Competitors)

✅ They balance power with content creators (Battling Supplier Power)

✅ They keep subscriptions affordable to maintain customer loyalty (Battling Customer Power)

✅ They innovate constantly to combat other entertainment options (Battling Substitute threats)

✅ They differentiate themselves in a crowded streaming market (Battling Competitive Rivalry)

By understanding these forces, you can:

>> Spot industry trends before they hit
>> Identify hidden opportunities and threats
>> Make smarter business decisions

On LinkedIn, a military officer asked me how Porter’s Five Forces might be applied to the military. It’s usually a sign of a strong mental model if you can cross disciplines with it, so I thought it was an interesting thought exercise. Here are some ways that it applies:

📉 New Competitors: If this conflict gets out of hand, will neighboring territories or factions get involved?
📉 Supplier Power: Where are the resources to fight this conflict coming from? Do we have logistics integrity? What do we need to do to ensure that we do?
📉 Customer Power: Are we winning hearts and minds? If not, what is our strategy?
📉 Substitute Threats: What are the alternative ways to resolve this conflict without force? Diplomacy? Sanctions? Other?
📉 Competitive Rivalry: If we engage in military conflict, do we have force supremacy? If not, how do we avoid a direct conflict?

Also, if you want to take this model to the next level, apply it to the lifecycle stage of your business.

I hope you found some food for thought in this short article. Cheers, Lex