Competition Value Chain



HAVE YOU EVER THOUGHT OF “COMPETITION VALUE CHAIN”?
JUST THINK IF WE CAN COMPARE MARKET DYNAMICS WITH A NATURAL ECOSYSTEM AND HOW WE CAN USE FRAMEWORKS IN THE PROCESS— IT IS JUST A FOOD FOR THOUGHT!

It’s pretty common to use various frameworks when working on a market research report. Listing drivers, restraints, opportunities and challenges (DROC), analysing the competition in the market based on Porter’s five forces, SWOT analysis of companies and products are fairly common and useful too.

One factor, however, is common behind the intent of using any such frameworks and that is competition. It could be direct, indirect or both. Yes, the core of any such analysis is almost always competition— either to analyse the competition in the market or study the preparedness of the player in question.

Direct competition is obviously among industry rivals or players. But we keep competing indirectly as well— be it as buyers, sellers, manufacturers or third party vendors, and we do this unconsciously!

Porter’s five forces

For instance, even in Porter’s five forces, we analyse the buyer’s bargaining power. The buyer, in certain cases, may be in a position to decide the price or vendor. This depends on the type of market, the number of players involved, product type and the demand, and many such factors. Typically, if there are too many players in the market and the product availability is optimum, the buyer could be spoilt for choice and could be in a position to bargain on the price.

This certainly affects the market dynamics and in a way makes it tough for new players to enter and survive. So, in a way, the buyers or end users are also an integral part of something we can call as “competition value chain”.

If we do not include these frameworks and analyse this whole meshwork in the marketplace, we as buyers may not even realize that we actually compete and help set a market trend or pattern.

Ocean Ecosystem

It’s pretty much interesting to study how all of these small and big entities in the market affect each other and the market ecosystem at large. Yes, we can call this ecosystem and easily compare it to the ones that are naturally present. For instance, try comparing it with an ocean which has small fish, big fish, plants & plankton and other aquatic creatures.

To study how they depend on one another for their survival and how the extinction of certain species or the excess of some, maybe due to human intervention, affects the dynamics of this ocean ecosystem may give interesting insights. Also, we can relate the market ecosystem to how the external entities such as sun and rain help the ocean ecosystem thrive. In a market, the external factors could mean socioeconomic and political conditions, government support and policies, and more.