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How to Use Ten-Forces Analysis for Competitive Intelligence

When you're monitoring the global environment for opportunities and threats for competitive intelligence, you need to consider ten forces that are likely to impact your organization. The ten forces fall into two categories: those that affect the velocity (speed) of change and those that affect the complexity of change (the number of issues that may impact an organization).

As these forces increase from low impact to high, the level of chaos increases proportionately, making it increasingly more difficult to stay on top of the changes required to remain competitive.

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In studying global forces, you need a solid systematic approach in order to constantly monitor for potential opportunities and threats. Ten-forces analysis provides a reliable methodology for evaluating the global context.

Forces that deal with velocity or speed of change

Two forces — market forces and technology — can quickly accelerate the speed at which you must respond to changes to remain competitive:

  • Market forces affect the supply, demand, and price of products. For example, when a market segment reaches over capacity (too many competitors), pricing shifts from differentiated to commodity based, and prices plunge. The velocity of change can become overwhelming and drive the need to significantly shorten new product-development cycles.

  • Technological forces can impact everything from how a product is produced to how it reaches the customer. You need to carefully monitor these forces because they can change the dynamics of global competition and demand adjustments in production, distribution, and marketing.

Forces that deal with level of complexity

Eight forces are related the complexity of change — the number of factors that may affect your organization:

  • Economic forces affect how much money consumers spend, what they choose to purchase, and whom they buy it from. By keeping yourself in the loop on economic forces, you're less likely to be surprised by sudden changes in consumer spending and behaviors.

  • Ideological forces are any beliefs that affect what consumers buy or where they buy. For example, whenever the United States has a recession, the "Buy American" movement gathers steam. Certain retailers have built businesses to cater specifically to consumers who want to purchase products made in the U.S.A.

  • Political and governmental changes, including who gets elected and which political party has the most power and influence, may affect government regulation that opens opportunities or poses a threat to your organization. By monitoring the political landscape, you place your organization in a better position to capitalize on changes.

  • Media issues are related to any publicity that positively or negatively affects your organization or your products, competitors, suppliers, or distributors. Bad news may require you to crank up your public-relations machine for damage control. If the bad news is about a competitor, it may open an opportunity for you to increase market share or at least help you avoid repeating that mistake.

  • Psychological and sociological factors often play a role in consumer behavior. With more people spending more time on social-networking sites, for example, businesses have had to shift some of their marketing resources to social media.

  • Moral and ethical factors come into play as social norms change or when an organization is looking to do business in a foreign country where the rules are different. For example, recent studies have shown that the new 20-something workforce (recent college grads) tend to see right and wrong simply as "getting what I want" instead of doing the right thing for company, customer, or vendors.

    Depending on the industry your company operates in, this shift in culture may radically change considerations made in the hiring process. The wrong people can (and will) engage in behaviors that severely damage your company or its reputation.

  • Environmental issues relate to weather, natural disasters, climate change, pollution, and anything else that can impact business. Climate change, for example, has significantly increased demand for green energy technology. On a smaller scale, events such as the eruption of a volcano can impact the weather and the economy in your markets.

  • Legal and regulatory factors may impact employment, marketing, manufacturing, and other areas. Constantly monitor regulations and legislation in all relevant markets.

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