This added dimension of understanding a competitor’s internal culture, value system, mindset, and assumptions helps in determining a four the initiate pdf free more accurate and realistic reading of a competitor’s possible reactions in a given situation. A wide gap between the two could mean the competitor is highly likely to react to any external threat that comes in its way, whereas a narrower gap is likely to produce a defensive strategy. The question to be answered here is: What is it that drives the competitor? These drivers can be at various levels and dimensions and can provide insights into future goals.
This corner includes determining the competitor’s perception of its strengths and weaknesses, organization culture and their beliefs about competitor’s goals. If the competitor thinks highly of its competition and has a fair sense of industry forces, it is likely to be ready with plans to counter any threats to its position. On the other hand, a competitor who has a misplaced understanding of industry forces is not very likely to respond to a potential attack. The question to be answered here is: What are competitor’s assumption about the industry, the competition and its own capabilities? A competitor’s strategy determines how it competes in the market. It is therefore important here to determine the competitor’s realized strategy and how they are actually performing.
If current strategy is yielding satisfactory results, it is safe to assume that the competitor is likely to continue to operate in the same way. The questions to be answered here are: What is the competitor actually doing and how successful is it in implementing its current strategy? This looks at a competitor’s inherent ability to initiate or respond to external forces. Its strengths will also determine how the competitor is likely to respond to an external threat. The questions to be answered here are: What are the strengths and weaknesses of the competitor? Which areas is the competitor strong in?
Firms are more often than not aware of their rivals and do have a generally good understanding of their strategies and capabilities. However, motivational factors are often overlooked. Sufficiently motivated competitors can often prove to be more competitive than bigger but less motivated rivals. What sets this model apart from others is its insistence on accounting for the “implicit” factors such as culture, history, executive, consultants, and board’s backgrounds, goals, values and commitments and inclusion of management’s deep beliefs and assumptions about what works or does not work in the market.
Hence by considering these factors along with a firm’s capabilities, this model is a better predictor of competitive behavior. Despite its strengths, Porter’s four corners model is not widely used in strategy and competitive intelligence. Porter’s four corners does not even figure in the top ten. Can be used to determine likely actions by competitors in response to the firm’s strategy. The predictive nature of this tool can also alert firms to possible threats due to competitive action.