MBA Schools love to educate us on various tools of thought or approach but over time many are proven wrong, not-quite-right, or just another management fad.
One that looks like it may go the distance, equally at home applied to existing businesses or new ventures – Porter’s 5 Forces.
Understanding Business Opportunity Porter’s 5 Forces
Porters 5 Forces model breaks down the attractiveness of a market to five categories- threat of new competition, threat of substitute products or services, bargaining power of customers, bargaining power of suppliers and intensity of competitive rivalry.
The following diagram illustrates it best:
To help understand customer requirements it is helpful to think in terms of needs, wants and demands of the customer. Needs are defined as ‘states of felt deprivation’ such as food and self-expression. Needs become wants when it is directed towards a specific object or service that is believed to satisfy that need. Wants are the manifestation of the human need that is shaped by the individual and their culture.
Wants become demands when the customer has the capacity and inclination to pay for the object or service.
Marketers divide the types of needs into stated, real, unstated, delight and secret needs as shown below:
HBO’s Game of Thrones TV series has been a huge hit (recently declared most pirated TV show of 2012). Season two has recently ended so I thought it would be fun to consider a few quotes from leadership perspective. This is obviously meant tongue-in-cheek, don’t take this too seriously!
So without further ado – here are my top 4 Leadership Quotes From Game of Thrones!
DISCLAIMER: Whilst I have not included spoilers, some of the concepts have been taken from events in the books which have not transpired in the TV show yet..
1. Winter is Coming
Alternatives to Maslow: Max-Neef
As discussed in an earlier blog post, Maslow’s Hierarchy of Needs has been getting a bad rap. The categories of Maslow’s are great, but the use of the pyramid seems questionable.
This line of thought, and a recent marketing assignment, had me wondering – if Maslows is faulty, what else could I reference when explaining possible needs of the consumer?
Enter Max-Neef’s theory of Fundamental Human Needs. According to wikipedia Max-Neef classifies the fundamental human needs as:
Kathy McMahon from blog peak oil blues has written a great post on Maslow’s and Max-Neef, if you have ten minutes to spare, check it out.
Businesses orientate themselves to the marketplace in different ways. The theory of company orientation towards the marketplace categorises businesses into one of five main orientations – production, product, selling, marketing and holistic marketing.
The production concept focuses on production efficiency, low cost and mass distribution. It is based on the assumption that consumers prefer products that are cheap and easy to obtain. Companies pursuing this strategy are effectively stating they can deliver their product to the end customer quicker and cheaper than their rivals.
At odds with the production concept is the product concept. The founding belief of this concept is that consumers prefer higher quality products that are innovative, more effective, or more styled than their cheap and easy to obtain counterparts. The assumption of this concept is that customers are able to detect and appreciate the higher quality.
Maslows Hierarchy Of Needs is a very widely used MBA and marketing model. What is it, why is it contentious, and should you use it?
In 1943 Abraham Maslow came up with the theory that is commonly referred to as ‘Maslow’s Hierarchy of Needs’. Maslow believed that we have five main categories of needs:
- Belongingness & Love
It’s widely used, not just in marketing. In the marketing context it is used to help think on how the companies product or service meets these (usually) non-stated needs. By meeting the holistic needs of the consumer, the product will be more meaningful to them, and in turn, have greater success.
The following diagram summaries the theory:
When was the last time you heard someone say ‘at this juncture’? Beware the juncture. Why? Chances are, when you last hear it used, it went a little like this:
“At this juncture,”
Sounds good so far….
“we’ll do it this <non-awesome way>”
At some point, during the meeting, or afterwards, you’ll feel glad the decision was so agreeable. Everyone leaves the meeting without having to do any additional work!