(Professional Business Analyst Training

organisation)

Porter's Five Forces

Porters Five ForcesWhile doing Enterprise Analysis, BA might do different types of analysis, Porter’s Five Force Model is one of the them. Porters Five Force was developed by Michael E. Porter to help companies assess industries competitiveness and build strategies. Its simple but very powerful tool to analyze and understand the business situation and industry dynamics.

The Five Forces are

Competitive Rivalry—Gauging the competition between the existing companies in the specified industry. •If there is stiff competition with quality products then rivalry companies may take the profit share and can reduce revenues.

Threat of new entrants—One of most common threat to companies is new entrants, threat may not only be from existing players but also from new entrants because as the industry grows at faster pace tends to attracts new entrants in business which reduces the margin of existing business. To prevent this happening companies should have some patents or high switching cost etc.

Traditional BA (Waterfall) Agile BARequirements are documented in Use Cases,Business Requirements, Functional requirements, UI Specifications, Business Rules.

Requirements are documented in Epics, User Stories and optionally Business (or Essential) Use cases.

   Focuses on completeness of requirement and spends time in ensuring the requirement is unambiguous and has all the details.

Focuses on understanding the problem and being the domain expert so that s/he can answer questions from the development team swiftly and decisively.

Focuses on getting a ‘sign off’ on the requirements.

Focuses on ensuring the requirements meet the currentbusiness needs, even if it requires updating them.

Often there is a wall between the BA/Business and the Development team.

Agile BA (Often called as Product Owner) is part of the team.

Tends to dictate solutions.Has to remain in the problem domain, leaving the development team ‘space’ to explore different solutions.

Long turnaround. Quick turnaround.Focus on what the requirements document said. In other words, output (Artifact) is a well written thorough requirements document.

Focus on the functionality of the developed software. In other words, output (Artifact) is the software that meets thebusiness needs.

   

Threat of substitutes—Is substitute product from different industry which may be used for the purpose the larger the substitutes available the lower the profit.

Bargaining power of buyers—In some industries buyers may have tremendous bargain power, if they are small in number. However we need to check how powerful the buyers are and can they get cost down.

Bargaining power of suppliers—

We can identify suppliers have strong bargaining power, if they are able to increase cost without affecting their sales.

Supplier may enjoy greater power if they are small in number difficult for buyers to switch.