Published on Jan 03, 2025
Competitive edge and focus on your unique selling proposition (USP) are the aim of any business and Porter’s Five Forces model is just one example of a convenient model for exploring and understanding the forces at play in a competitive market place.
The role of Intellectual Property (IP) strategy in influencing each of those forces merits highlighting for start-ups and upscaling businesses, in particular so that the strategic use of Intellectual Property (IP) as a business tool can be fully understood. By adopting Porter’s Five Forces model as a tool to bring clarity on the forces impacting your market segment, I will peel back the layers on how leaders can use their IP and create an IP strategy that aligns with the business’ overall competitive strategy and the organisation’s mission. For companies with innovation as their core differentiator and USP, IP strategy is the hidden gem that can tip the balance of competition in your favour.
Michael Porter's Five Forces model provides us with a framework for a comprehensive understanding of the competitive landscape in the marketplace. It outlines the five key forces that shape the competitive environment, namely,
These forces shape the direction in which businesses aim to navigate. Without taking control of these forces, businesses can find themselves caught in a rip tide and ending up somewhere they do not want to be.
Now, let's explore deeper into:
(i) what does it mean to have an Intellectual Property (IP) strategy? and
(ii) how can you adopt an IP strategy that aligns with your strategic direction and influences the competitive forces of the market place in a way that tips the balance in your favour?
Firstly, the basics - Intellectual Property is an umbrella term covering patents, trademarks, copyright, registered and unregistered design rights, trade secrets and know-how. These are crucial intangible assets in today's knowledge-driven economy. However, this is not about ‘An introduction to patents or trademarks’. The aim of your IP strategy is that it works for you to actively use your IP as your vital business tool that you can leverage to gain competitive edge.
Let’s look at the following scenario – You’re aiming to enter a new market segment and of course, focus and clarity of that market segment is crucial. One of the most significant challenges any business can face is the barriers to entry to a market segment. Well, this is where IP strategy can become your secret weapon. By owning and leveraging your IP rights, you can significantly increase those barriers for your competitors. Patents, for instance, can provide you with a monopoly over a particular technology, and increase the business risks for your competitors if they decide to copy your products or processes. So, your IP can be used to deter potential new entrants by creating additional barriers to entry and as you can see, you have already impacted the forces that we mentioned already.
But it's not just about building walls around your castle; it's also about dismantling the walls of your competitors’ castle. As a new market segment entrant yourself, you will be watching your competitors carefully. By monitoring their IP, you can gain insights into your competitors’ strategies potentially even before they hit the market and, more importantly, identify potential barriers they are trying to put up AGAINST you. With the benefit of such competitor intelligence, you can take steps to de-risk and counter their moves, reducing those barriers and ensuring a smoother entry into your chosen market and then further using your IP to gain time-advantage and grow and upscale your business.
In the ever-evolving business landscape, the interplay between these forces is dynamic and relentless. To stay competitive and succeed, you need to be proactive and strategic. By adopting an appropriate Intellectual Property strategy, you can influence the competitive dynamics in your favour.
In conclusion, the integration of Porter's Five Forces model with an effective Intellectual Property strategy is a potent demonstration of how you can use your IP to navigate the complexities of today's international marketplace. But IP strategy is NOT a ‘one size fits all’, it needs to be a match for your overall business strategy.
By attending the new event Creating and Implementing an IP Strategy for Start-Up and Upscaling Companies, you will gain an understanding of how the interconnected strands of business strategy and IP can be woven into an effective IP strategy. The course is scheduled to run on various dates across the year. Our expert speaker is a patent attorney that listens and learns about your business and then works with you to help build your IP strategy in a way that works for you.
You might also like to know that Marie Walsh is presenting a new course titled Patent Strategies for Generic Medicines and Generic Medicine Companies with Dr Lawrence Cullen.
(1)Porter’s Five Forces in a competitive marketplace
Porter, M. E. “How Competitive Forces Shape Strategy.” Harvard Business Review 57, no. 2 (Mar–Apr 1979): 137-145
Published on Jan 03, 2025 by Marie Walsh