May the forces be with you

Knowing what you don’t know is just as important as knowing what you do know, especially when starting a business. When it comes to microeconomics and business strategy, I remember from macroeconomics senior year of high school that the downward-sloping curve on a supply and demand graph is the demand curve. Of course, I also know the ultimate goal of a business is to provide goods and/or services that can turn a profit. (But is that all? Steve Denning of Forbes has a different take.)

Porter's Five Forces. Designed by Greg Emmerich.

Porter’s Five Forces. Designed by Greg Emmerich.

These tidbits of a priori knowledge were small consolations when I read Michael Porter’s tour de force article in the Harvard Business Review. The article–which was a summary of Porter’s 1980 book, Competitive Strategy: Techniques for Analyzing Industries and Competitorsdescribes a five-forces model for business strategy. Porter argues that a business must develop a business strategy–a formula for competition, goals and ways to achieve those goals.  His five-forces model focuses on five competitive forces, which when taken together, give a global overview of market position and determine long-term profitability.

For mobile app designers, the most influential forces are threat of substitution and supplier power. Similar mobile apps compete amongst one another, especially when multiple apps offer the same services at varying price points. To introduce a new app, one needs to be either innovative or inventive to make consumers switch from another app or need the app. With only two widespread mobile operating systems, Android and Apple, there are few places for the apps to be displayed. A solution could be to graduate to new operating systems, such as Windows and Google.


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