The next environmental forces block is “Industry Forces” and this section is used to determine if your business model will have a competitive edge today and tomorrow.
To understand industrial forces, you need to assess who your competitors are. A tool called Data Axle Formerly called Reference USA (available at many libraries) is a valuable tool to locate and assess your competition. The SBA also has a tool called SizeUp that helps you to assess your competition.
After you generate a list of competitors, you will need to understand exactly what their business model provides.
- Is there a dominant player in the industry? If so, you need to determine if they have the ability to marginalize or even crush your business if they see you are a threat.
- Do they have a weakness that you can exploit? For example, Uber used a mobile app to create a peer-to-peer ride-sharing model that companies like Yellow Cab could not compete with.
- Do you have a process or technology that might disrupt these big companies?
- Another question to ask yourself is how dependent are you on your key partners and suppliers? What would happen if they left or were not able to evolve with you?
Essentially when it comes to industry forces, you are performing a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunity, and Threats as they relate to your industry position. Much literature has been published on SWOT and will serve as valuable resources for understanding your industrial forces.
What are the industry forces that will affect your Business Model Canvas?
Last post in the series: Macroeconomic Forces
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