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Porter Competitive Model – Five Forces

COMPETITIVERIVALRY

BUYERSSUPPLIERS

SUBSTITUTES

NEW ENTRANTS

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Determinants of Buyer Power

Bargaining leverage:

- Buyer concentration vs firm concentration

- Buyer volume

- Buyer switching costs relative to firm switching costs

- Buyer information

- - Ability to backward integrate

- Substitute products

- Pull-through

Price Sensitivity:

- Price/total purchases

- Product differences

- Brand identity impact on quality performance

- Buyer profits

- Decision makers’

- Incentives

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From product to relationship marketing

Relashionship marketing is attracting, maintaining and enhancing customer relationships

Focus on customers

Commitment

Custmer long time value

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CUSTOMER ANALYTICS

Retailers are now compiling more data on their customers and their purchases than ever before, providing a potential wealth of insight into their demographic attributes, tastes, preferences and buying patterns. These insights can be leveraged to optimize product offerings and promotions, enabling custom offers to specific customer segments or even precisely targeted customers, driving higher returns and greater customer satisfaction.

Customer-centric decision making

Collecting customer data

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Analytics has been defined as “the extensive use of data, statistical and quantitative analysis, explanatory and predictive models, and fact-based management to drive decisions and actions” (Davenport and Harris, Competing on Analytics, 2007)

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