Understanding Market Dynamics in Product Management - Learn from the Beginning

Skype had 17 years of extensive experience to beat the quarantine period of the 2020 COVID-19 pandemic, but it still was beaten by Zoom. Skype saw the biggest fall of 26% in its global market share during the 2020-21 pandemic; and not just Skype, but Zoom also beat many other video teleconferencing software applications. Thus, it is crucial for a product manager to keep an eye on their product’s competitors.

As a product manager, you also have to consistently keep an eye on your competitors’ situation in order to assess how they may affect your product or service. With a thorough understanding of your industry, you can evaluate the opportunities of and the threats to your business and also focus on developing unique product offerings that will give you an edge in the market.

You can achieve this by using Porter’s five forces analysis. Let’s watch the video to learn more about it.

To gauge the conditions in your industry, you can use Porter’s five forces:

1. Threat of new entry: The ease with which new players can enter your industry

2. Buyer power: The power held by the customers in the industry

3. Supplier power: The ability of suppliers to drive up prices and pull down margins

4. Threat of substitutes: The possibility of another product upstaging yours

5. Competitive rivalry: A measure of how intense the competition is within the industry

When you are planning to enter an industry, you want low barriers to entry but if you command a leadership position, high barriers to entry are favorable for you.

Additional Reading

Porter's five forces: Learn more about Porter’s five forces through an example from the automotive industry