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Saket Sambhav

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ADJUVA LEGAL® • 2m

Learn & Earn (Part 3) 🧠: Is Your Market a Goldmine or Quicksand? Check Porter's 5 Forces! ⚔️ Welcome to Part 3 of our Learn & Earn series! Today, let's talk about understanding the real profit potential of your market before you invest too heavily. Flying blind is risky! ✈️ Michael Porter's classic Five Forces framework is like an X-ray for your industry – it reveals where the power lies and how tough it really is to build a sustainable, profitable business there. 🤔 Let's break it down simply: The 5 Forces That Shape Your Industry's Profitability: 🔥 Intensity of Rivalry: What it is: How many direct competitors do you have? Are they roughly equal in size? Are they competing aggressively (e.g., price wars)? Why it matters: High rivalry usually means more pressure on prices, higher marketing costs, and squeezed profits for everyone involved. 🚪 Threat of New Entrants: What it is: How easy is it for a new company to enter your market and start competing? Are barriers like high costs, complex tech, regulations, or strong brands protecting you? Why it matters: If entry is easy (low barriers), expect constant new competition popping up, which keeps profits down. High barriers are good for existing players! 🔄 Threat of Substitutes: What it is: Can customers achieve the same outcome using a completely different type of product or service? (Think trains vs. planes, or WhatsApp calls vs. traditional calls). Why it matters: Lots of good substitutes put a ceiling on how much you can charge, even if direct competition isn't intense. 💪 Bargaining Power of Suppliers: What it is: How much power do the suppliers of your key inputs (raw materials, components, crucial software) have? Are there many options, or are you reliant on a few? Why it matters: Powerful suppliers can dictate higher prices or stricter terms, eating into your profits. 🛒 Bargaining Power of Buyers (Customers): What it is: How much leverage do your customers have? Are there many small customers, or a few huge ones? Can they easily switch to a competitor? Why it matters: Powerful buyers can demand lower prices, better quality, or more services, squeezing your margins. Why Use This Framework? Understanding these forces helps you spot opportunities (e.g., entering markets where forces are weak) and build defences (like strong branding, patents, customer loyalty) against the threats. It's crucial for finding your strategic edge! 🛡️ Which of these forces feels like the biggest challenge or pressure point in your specific industry right now? Share your thoughts below! 👇

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