Competitive Analysis with the Diamond Model

The diamond model is a method developed by Prof Michael Porter to analyze competitiveness. Competitive analysis helps to understand the business and the market in which the business is located and the conditions of competition. Thus, the perspective of gaining a competitive advantage is provided to the project team. At the stage of creating a strategic framework in Workcube Digital Transformation projects, Workcube consultants use the Diamond Model to analyze the competition of the business.

• Demand Conditions: The survival of a business depends on making sales, while selling depends on creating demand. Market trends, expectations, growth scenarios, local, national, and global market sizes, and demand structure are examined.
  

           Write your results in simple and understandable sentences directly on the diagram. In addition; You can describe your findings as weak, moderate, or strong.

           E.g; The prevalence of smartphones and tablets has narrowed the demand for desktop computers. In this case, a manufacturer of desktop computers has to find a new way according to demand conditions. Or cultural differentiation according to geographies differentiates food. You can't sell hot sauce in a society that doesn't like chili.

• Input Conditions: Every business and geography has its possibilities. Input conditions such as human resources, physical resources, information resources, capital resources, and infrastructure expand or shrink the capacity of the enterprise. Understanding input conditions helps to understand opportunities and what can be done to push opportunities. E.g; A company that will produce medical devices tries to establish a factory in a city where talented engineers live. Data centers are built in countries that are cold and have low energy costs. Reducing input costs is very important even in value-added industries.
  

• Associated and Supporting Industries and Institutions: No business is strong alone. There are complementary enterprises, educational institutions, sectors. Examine the related and supporting sectors and institutions according to the nature of the work done by the company.
  

          For example, a dairy processing plant needs plastics, a glass bottle, labels to packaging its products, designers to design packaging. In a place where there is no packaging industry, the milk processing plant is forced.  

• Firm Strategy, Structure, and Competitors: Competition increases quality and accelerates development. If the opponents are strong, the job gets harder. The goals and management styles that companies set in order to achieve their intended success are important. The formation of intense competition forces the firm to innovate for competitive power.

           E.g; A hierarchical company may be successful in construction, whereas a horizontal organization in architecture will be more successful in design.

• Government and Regulation: Government and legal regulations can influence and direct the entire market, competition, demand, procurement process, and all other factors. Examining and understanding the regulations that affect a company guides implementation and allows you to do the right things.

            E.g; Taxes may vary according to countries and cities, incentives can be subject to discount, CE in Europe, ASTM in America, DIN in Germany, TSE norms in Turkey are valid. Carbon emission rates in Europe are lower than in China.

• Chance: Out-of-control developments can turn into opportunities or cause losses. When creating a strategic framework, the chance factor and the conjuncture are taken into account.

           For example, a storm arises, hail falls, and the windows of cars and houses are broken. This leads to the loss of insurance companies, while there is an opportunity for the manufacturer and services of glass.

Try to get to know the competitors by making tables about the competitors as follows.

* Local, National, Global, ** Low, Medium, High
 

Exercise

Conduct a competitive analysis of a business using the Diamond Model. If possible, discuss the analysis with at least three people and finalize it with their opinions.