Potential Sources
of Competitive
Threats
  Joint venture between competitor, other firm
    New synergies created
    New whole greater than sum of its parts (2+2=5)
  Low-cost overseas suppliers
    Example: Apple iPhone - low cost mfg. enables killer product with superior features, packaging at very competitive price
  Seemingly insignificant trends
    "weak signals" are often ignored or dismissed
    May grow into larger trends!
    Pay attention now - before it's too late!
  Poor customer satisfaction
    Can lead to customer defections
    Trend starts slowly, but may gain momentum
    Don't ignore this trend!
  Established competitor shifts strategy
    Example: Equip. mfr. that sold via dealers decides to sell direct to users
    New business model - first mover advantage is theirs
  Acquisition of competitor by larger firm
    Example: Amazon.com's acquisition of Zappos upends the online shoe store space
  Suppliers of complementary products or services expand into your space
    Example: Asus manufactured laptops for Dell & others, now competing against them with its own branded computers
  New technology/process emerges
    Example: cloud-based apps displacing enterprise software
  Major market shift
    Example: Apple's iPod + iTunes ecosystem
    Competitor could pioneer a new business model that could change industry dynamics
  Regulatory change
    Could make it harder for you to compete
    Examples: tarrifs, taxes, restrictions on your products (e.g., emissions)
  Companies using related technologies
    Adapt their technology to target your market, customers
    May allow them to offer a "better mousetrap" to your customers
  Companies competing in a related product/field
    Jump over into your segment
    Little additional investment needed
    Example: Amazon.com expansion into "cloud" apps & data storage
  Companies already targeting your market/customers with unrelated products
    Expand their offerings to compete with you
  New startups - staffed by former employees
    Potential to steal key customers
    They know the dynamics of the industry
    They intimately know your strengths/weaknesses!