Competition Analysis

Probably, it is necessary to carry out the analysis of competition environment in the industry from various aspects in order to establish the operation strategy or the competition strategy. Even while saying so, it is not very simple to control the important factors by understanding the diversified and complex realities.

A framework of analysis was constructed on the basis of 5 competition factors which are described below, as shown by Michael E. Porter in his book “Kyoso no Senryaku” (Competition strategy). This framework is very useful for streamlining the information and compiling the ideas.

1. Threat due to new entrants.
2.Hostile relationships among the competitors.
3.Threat of alternative product.
4. Negotiation powers of the customer.
5. Negotiation power of the suppliers.