Competitive intensity
What your backer wants to know is how intense competition is in your main business segments and whether it is going to intensify. And why.
They want to get a sense of what is likely to happen to pricing in your market. Future pricing is critical in financial forecasting, more important even than market share gain or loss, since every penny of a price rise falls straight to the bottom line.
Likewise, every penny of a price reduction is a direct hit to the bottom line. Your backer needs to know.
There’s no better tool for assessing the competitiveness of an industry than Michael Porter’s five forces model. It first appeared in his Competitive Strategy: Techniques for Analyzing Industries and Competitors in 1980.
Porter identified ...
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