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Porter - Competitive Forces - Imitators

Porter's book is excellent because it presents comprehensive tactics to manage or mitigate shifts in the bargaining power of suppliers and buyers. More important, it list tactics when a competitor enters your market space with an imitation of your product or service at a substantial price break - profit killers.

Porter's Five Forces ModelMy reading of history is that companies with a very successful product, unless protected by a patent, will see significant imitation within at most two years. Worse, to avoid the patent, you imitators will bring a substitute to market. If you provide a service, its worse.

Porter lists tactics to spot, slow or restrict new entrants who are imitating your product or service. The analysis quantifies the rate of imitation or substitution over time. How many firms are attracted to your market?

Most of today's "new tactics" are variations on Porter's tactics for each of the five forces.

There is one book that takes Porter's work to the next level. The Mercer Group (Slywotski, et. al.) in Profit Patterns (out of print buy it used on Amazon) exams shifts in the source of profits as products and services are introduced, mature or become a commodity and disappear. It is an easier read than Porter and shows you how to spot trends. The book's thesis is imitators and rivals will seek to replicate your profits, and the competition will drive profits down. You have to anticipate when to shift your focus to other profit opportunities, i.e., spot the pattern early and adapt.

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