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How Not to Start from Zero for New Startups

How Not to Start from Zero for New Startups

Looking to start a business but are unfamiliar with the potential profitability in the industry, and don’t really want to start everything from zero?

This simple tool is the perfect one for you to start with — Porter’s Five Forces Model. It is an effective tool to evaluate the existing market.

And if sometimes you are asked to analyze a market and identify its major competitors but you are struggling on where to begin; or, if you are looking to raise your company’s competitiveness in the industry, the Porter’s Five Forces Models could then be your remedy.

What exactly are the Porter’s Five Forces?

The Porter’s Five Forces Model is named after Michael E. Porter, an economist. He proposed the model in his 1979 book Competitive Strategy. While there are different names for the five forces to different experts, they are essentially the same. Generally, the five forces are as follows:

    1. Threat of Substitution

    It concerns the availability of substitutes products or services from the competitors. Porter’s definition of substitute good in the model refers to a good in another industry. The goods or services are substitutes if they can be used in place of one another. This force is affected by various factors including the cost for customers to switch to a substitute, buyer’s propensity to substitute and price-performance of substitutes.

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    2. Threat of Established Rivals

    It considers the strength of the rivalry present in the current industry.There are a number of possible factors including number of competitors, pace of market growth and diversity of competition.

    3. Threat of New Entrants

    It refers to the potential threat posed by newcomers in the industry. It is also known as the barriers to entry as it measures the vitality of new entrants in an industry. Capital costs, branding of existing competitors and requirement of proprietary technology or patents are the major factors influencing the force.

    4. Bargaining Power of Suppliers

    It concerns the ease for suppliers or factor of production to raise prices. For example, the number of possible suppliers and whether they produce homogenous or differentiated products can influence the price to a great extent.

    5. Bargaining Power of Customers

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    It considers the ease for customers to push for a lower price. To illustrate, it is more likely for customers to demand a lower price if they purchase a large amount of goods or services. Number of customers and brand name strength also affect the bargaining power of customers.

    The first three forces are from horizontal competition while the remaining are from vertical competition.

    What’s good about the Porter’s Five Forces?

    Every owner and stakeholder of a business has a question in common: how to maximise the profitability?

    By evaluating the industry using the model, we can grasp a clearer picture of the overall environment of the industry. In fact, the model can also be applied to have a better understanding of the current major competitors. Identifying their strengths and weaknesses allows us to devise a better strategy to further boost our competitiveness.

    We can also evaluate the potential of our business by comparing us with other competitors to see if the market has been saturated or not.

    On the other hand, the model tells us on what aspect we are better. Thus, we can put more effort to expand our competitive advantage in order to always stay ahead of the counterparts.

    Besides, after analysing the current and potential future states of the five competitive forces, we can seek to manipulate the forces in our favour. Adjusting the strategy can change the impact of competitive forces on the organization. A proper shift in direction can lead the company to a bright future.

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    Anything challenging about the Porter’s Five Forces?

    Despite that Porter’s model may be applied to a lot of good use, it is a little too ideal to look at the industry. The model provides directions to evaluate an industry but such analysis is based on a perfect market assumption. In reality, the market is seldom if not never in such ideal conditions so it is impossible to perfectly evaluate an industry with this model. Instead, the model is only applicable to simple market structures.

    Morever, the model overlooks a sixth force – Complementors. Complementors refer to those who sell products and services that are best used in conjunction with a product or service from a competitor. Intel and Apple are a good example which they are in fierce competition yet there is obvious reliance of each other in the industry. Taking the sixth force in account makes the model more well-rounded.

    Lastly, the model also overlooks the technology component in today’s business world. As the model was proposed back in 1979, influencing power of technology was almost negligible compared to nowadays. Disregarding the technological aspect may render the whole analysis inaccurate. Hence, the factors in digitalisation or globalisation is usually added into the model now.

    When’s the best time to apply the model?

    When is a good time to make the best use of the Porter’s Five Forces Model? For business startups, it is unwise for entrepreneurs to start a company before exploring the profitability of a new entrants in the industry. In that case, the model can come in handy to analyse the market before putting in effort and investment.

    Also, the model can be a good tool for an operating businessto fine-tune its strategies for better growth. It is especially useful when the business is experiencing stagnant progress and has no clues where goes wrong. The model may provide the answer for the dissatisfaction.

    Here we demonstrate how the Porter’s Five Forces Model can be used to evaluate a business. Two world-renowned business, Facebook and Nike, are chosen.

    Example 1: Facebook

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    The social networking market is significantly competitive and is constantly under rapid changes. Due to frequent introduction of new technologies, Facebook has to cope with the situation by continuous innovation and adaption to the ever-changing environment. Besides, the social networking market is unlike other market for its ease to enter the industry.

    Consequently, increased number of competitors intensifies the competition further, making the Threat of New Entrants and Established Rivals greater. Lastly, as the mobile market is emerging while the switching cost for users from computer to mobile is low, the Threat of Substitution is also great.

    Example 2: Nike

    The Threat of Established Rivalry is the major worry for Nike, as there is established as well as upcoming counterparts in the market. The low barrier to entry also poses a big threat to Nike as the large number of competitors will significantly impact the profitability. If Nike is unable to adapt to the customers’ trends, the growth can be severely impacted or even recorded in negative digits.

    Besides, the Bargaining Power of Customers is also worth consideration as the wholesaler can request for greater discounts for their tremendous demands.

    Featured photo credit: Flaticon via flaticon.com

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    Jeffrey Lau

    Editor. Sport Lover. Animal Lover.

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    Last Updated on August 19, 2019

    20 Critical Skills to Include on Your Resume (For All Types of Jobs)

    20 Critical Skills to Include on Your Resume (For All Types of Jobs)

    A resume describes your critical skills in a way that compels a hiring manager to want to meet you. That is a resume’s sole purpose.

    And make no mistake: Writing a resume is an art.

    Today each corporate job opening attracts 250 resumes on average, and somehow yours will need to rise above the competition. It’s actually harder to snag an interview from an online posting than to get into Harvard. But don’t let that intimidate you. Instead, open your laptop, roll up your proverbial sleeves, and let’s get to work!


    Employers generally prefer candidates with skills that show leadership ability, problem-solving ability, and perseverance through challenges. So in the resume, you should demonstrate that you’re a dynamic candidate.

    Refine the skills on your resume so that you incorporate these resume “musts:”

    1. Leadership Ability

    Even an entry-level employee can show leadership. Point out how your skills helped your department ascend to a new level. Capture leadership attributes with compelling statements.

    Example:

    “Led change that drove efficiency and an ability to cut 800 error-free payroll checks.”

    2. Problem-Solving Ability

    Most employees are hired to solve problems. Showcase that ability on your resume.

    Example:

    “Led staff in campaign to outrival top competitor’s market share during a down cycle.”

    3. Perseverance

    Have you been promoted several times? Or have you maintained margins in a down cycle? Both achievements demonstrate persistence. You look like someone who can navigate roadblocks.

    4. Technical Skills

    Consider including a Key Skills or Technology Skills section in which you list computer and software skills.

    Example:

    “Expert-level knowledge in Java.”

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    5. Quantified Results

    Nothing is quite as attractive as objective results. Did you increase sales by 25 percent? Win three new clients? Surpass the internal goal by 15 percent?

    Use hard-hitting numbers to express your point. State the result first, and then provide a sentence or phrase describing the critical skills you applied to achieve the milestone.

    Example:

    “Boosted sales by 200 percent by developing new online platform that made it easier for customers to compare and contrast sizes, textures, and fit.”

    6. People Skills

    Employers prefer congenial staff members to prima donnas or mavericks. Relate your strongest soft skills.

    Example:

    “Organized, hard-working staffer who listens well and communicates effectively.”

    7. Passion in the Field

    Recruiters and hiring managers can intuit whether candidates care about their career performance by the dynamism behind the descriptions of their skills on their resumes. Are your efforts “transformational” or merely “useful?” Were your results “game-changing” or boringly “appropriate?”

    The tenor of your words reveals whether you’re passionate or passive. (But don’t overdo it. See the “Hyperbole” section below.)

    8. Being the Entrepreneur within the Corporation

    Whether you took the initiative to create a new synergy or worked independently to land an opportunity, share how you furthered organizational goals through your self-directed efforts.

    9. Your Adaptability

    Have you switched career paths? Weathered a corporate takeover?

    Make it clear that your resilience helped get you and your organization through the turbulence.

    10. Confirming Your Expertise

    Every job posting states experience requirements. Ideally, you want to meet these requirements or best them. But don’t exaggerate.


    While proving that you possess the credentials described in the job posting, you can still stand out if you are able to offer additional special skills to showcase your personality.

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    Consider adding any of these special accomplishments, if true:

    11. Referencing Award-Winning Talents

    If you played center on your college basketball team that made it into the Top 10 finals, then working collaboratively and cooperatively are among your natural callings. Be sure to say so.

    12. Unveiling Your Work Persona

    If you were repeatedly singled out for your stellar performance in work settings, becoming employee-of-the-month, top revenue generator, and so on — it’s worth mentioning.

    13. Capitalizing on Commonalities

    From Googling the hiring manager, you discover that she was formerly a Peace Corps volunteer in Belize. Listing your Spanish immersion course in Central America may draw her attention to the other outstanding skills on your resume.

    14. Highlighting Creative Tactics

    If, for example, in your HR role, you piloted an employee incentive program that became an industry model, include it. Such innovative thinking will command an employer’s attention.

    15. Specifying All Accolades

    Listing any honors received instills confidence that you will bring that level of perfectionism forward in a corporate environment.

    16. Transferable Skills

    You spend your spare time conducting your community orchestra. Highlight this after-hours pursuit to show that you have the critical skills needed to keep a team on task.


    Take note: Hyperbole can hurt you. So, show your credibility.

    Although it may be tempting to use embellishments to boost your experience, improve your job title, or enhance your education, resist. These days, a five-minute search will reveal the truth. And taking self-inflation too far could easily come back to destroy your career.

    Hiring managers have their antenna up for resume hyperbole. A survey shows that 53 percent are suspicious that candidates are often dishonest.

    Follow these guiding principles when writing your own resume:

    17. Accurately Describing Your Degree

    Make sure to differentiate between certificates attained and degrees earned, along with the name of the institution awarding them.

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    18. Stating Job Duration with Honest Dates

    Honesty is the only policy when reporting the length of a particular job. If you’ve been out of work for an extended period of time, state the reason you have gaps.

    Whether you traveled, had to cope with a family emergency, or went back to school to change your professional track, communicate the positive outcome that came from the hiatus.

    19. Claiming Only the Skills You Truly Possess

    Unless you’re proficient in a software program or are fluent in a second language, leave any mention of them off.

    Conversely, if you feel like you must include them, then accurately qualify your level of competence.

    20. Being Honest About Your Role in a Project

    You may think you were the lead person because you did most of the work, but chances are your supervisor thinks otherwise.

    Besides the 20 critical skills to include on your resume, here’re some important notes for you.

    Bonus Tips for Writing a Resume

    You Only Have 6 to 7 Seconds to Impress the Employer

    Hiring managers and artificial intelligence “bots” may spend only 6 to 7 seconds perusing your resume, which means you need it to teem with essential skills, quantifiable achievements, and action words.

    If, in fact, you believe that a “bot” will be analyzing your resume before it even lands on a hiring manager’s desk, be sure to include some of the actual key words from the posting in your document. There’s no reason why you can’t customize your resume to each job posting.

    Another tip: Be sure to show your resume to a few individuals who work in your field, so that you can fine-tune the information as needed.

    Starting at the Top

    The Objective at the top of your resume is optional if you’re seeking the same job you already have, just at different company. However, if you’re switching fields, it’s critical to include an Objective, which is a one-sentence summary of the job you want.

    For example:

    Objective: To become web editor at a thriving news website.

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    If you’ve been in your field for ten years or more, you will probably want to include an Executive Summary. This is a one-sentence takeaway about who you are, including the critical skills you amassed throughout your career.

    For example:

    Executive Summary: Award-winning creative director with over ten years experience managing teams on three continents.

    Depending on your field, you may also want to add some skills as bullet points in the Executive Summary section.

    And what about your Education? If you graduated from college within the past ten years, include your Education just below the Objective section (and forgo the Executive Summary). If it’s been over ten years since you graduated, then include your Education at the very end of your resume. Only cite your grade point average (G.P.A.) if it was exceptional—3.7 G.P.A. or higher, or if you won scholastic awards.

    Ideally, the critical skills you amassed during college, at your previous job, and throughout your career will add up to a riveting portrait of a professional who’s ideally suited for your dream position: You.

    Tailor, Tweak, and Fine-Tune

    If you’re targeting different kinds of organizations, you’ll need customized resumes for each outreach.

    Don’t be afraid to parrot some of the words on the list of requirements back to the company. Many times, organizations will actually use the key words mentioned in the job posting when screening resumes.

    Approach Your Resume as a Skills-Based Story

    Like any good storyteller, lay out the framework at the beginning. Include the skills you’ve mastered and state how you can add value—wording your sentences in a way that reflects the specific job you’re seeking.

    Are you vying for a sales position? Quantify your results: “Responsible for 50 percent of all sales that resulted in $750,000 in annual revenue.” Use your critical skills, peppered throughout your resume, to tell the exciting story of your distinguished professional career!

    Researching the organization that you’re targeting will help you make your examples specific. Does the company cater to a particular audience or clientele? Be sure to note any experiences you’ve had with similar audiences.

    Putting It All Together

    A resume is not a laundry list. It tells a cohesive story. Your story should highlight your qualifications and critical skills in a way that makes a logical, well-constructed case for your compatibility with the organization and its advertised position.

    Packaging your story into the concisely prescribed format of a resume means that it will read as a synopsis — one that will hopefully land you the job.

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    Featured photo credit: Bram Naus via unsplash.com

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