Search Engine Marketing Los Angeles Uses Five Forces Business Strategy

Staff Writer: Jessica Rennie

Date: 6.16.2012

 

In 1979, during his time at Harvard Business School, Michael E. Porter formed what is now known as the Porter’s Five Forces.  Even today, the Five Forces continues to be used by business marketers and marketing consultants los angeles.  This strategy can predict the attractiveness of joining an industry, determine aggressive opportunities, and also foresee how potential a good size profit and return on investment will be.

As the name suggests, there are five forces or categories that influence this strategy.  Three out of the five forces talk about competition found from external sources.  These three are: the threat of substitute products, the threat of established rivals, and the threat of new entrants.

The other two forces are considered internal threats.  They are the bargaining power of suppliers and the bargaining power of customers.

Using these as the framework that is used to strategize in a business can also be used for search engine marketing California.  Both groups face some of the same challenges.  The concepts should work for both with a little tweaking.  Porter designed the analysis so it can be applied to a variety of problems from businesses making more money to governments stabilizing their industries.

The threat of new competition or new entrants makes businesses have to constantly update their services to keep customers interested and continuing to use that company, rather than moving on to one of the newer companies.  In the case of search engine marketing company los angeles, this means competition over keywords.

The threat of substitute products or services means that customers will likely latch onto new ideas presented to them.  This means that there is also a threat of alternative marketing tactics.

Without buyers, companies have no business.  Everything relies on what the consumer wants to purchase, a concept that forms an essential component of the Five Forces.  It gives the customers bargaining power.

In SEO, consumers present the threat of impacting rank.  Rank can mostly be determined by the number of consumers using the product.  Without buyers, rank will certainly go down.

Not only do buyers have influential power, but suppliers have authority as well.  If there are no other options for suppliers, a supplier can have a great source of power over the company when it comes to materials, components, labor, and expertise services.

The last of the five forces is the competitive rivalry between companies.  All companies are competing to be at the top and to make the most profit.   With SEO, this can be competition for a keyword.  The more rivals there are, the more competitive an industry is.

These five components are very broad and basic business strategies to know.  Because of this, they can be applied to many different scenarios.  For SEO, knowing these can provide a clearer pathway to making a business have a higher ranking.

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