'Power Niche', An Extension of Porter's Concept
Mar 06, 2017 12:26 AM EST
Michael Porter, the Harvard Business School professor behind the famous "Five Forces" is often asked what is the biggest mistake people make in the business world and he answers "trying to get better" than their competitors.
Instead, he says, "be different", according to BBC's Learning English. Bruce Stachenfeld, the managing partner of a law firm based in midtown Manhattan think what Porter says is not far off from the concept of "innovating".
He sums up and puts Peter Drucker and Porter's concepts together, and suggests that a strategic plan in the business world should logically be innovated and marketing to create a customer, and doing this by being different from others, as opposed to being better.
Stachenfeld proposes the essence of "power niche" and calls it a marketing plan worth dwelling on. He defines the plan that he wrote in a short article in Above The Law, to be a small-sized niche within a bigger industry that no one else has dominated or owned.
According to Stachenfeld, the niche is often not obvious, thus it has to figure out and created. He said that the business will have to step in, learn everything about it, and tell everyone about it, somewhat becoming the real "owner" of the power niche by staking out your homestead in a virgin territory.
Then it becomes a virtuous cycle as more learning and doing takes place. All of this enhances the bargaining power within that niche. Instead of contending for business in the bigger industry, the business now has eager clients wanting to pay within the smaller power niche.
Although the plan is still being established, it adds incredible insights to Porter's existing "five forces" model. While the elaboration evolves, the message of power niche remains simple: Don't be the absolute "best", be the absolute "different".