6 Forces That Can Make Your Business Obsolete Overnight

When thinking about competition, most leaders fixate on their direct rivals. But in reality, six forces shape the battlefield where businesses fight for survival and growth. Understanding these forces is crucial to recognizing when your industry is approaching a strategic inflection point.

The six forces are:

• Existing Competitors: The companies you directly compete with.
• Suppliers: Those who provide the inputs needed to create your product or service.
• Customers: The buyers whose preferences and power influence your success.
• Potential Entrants: New players who could disrupt the market with fresh ideas or lower costs.
• Substitutes: Alternative products or services that fulfill the same needs.
• Complementors: Businesses whose products enhance the value of yours.

Among these, substitution is often the deadliest force. When a new technology or approach substitutes your product, it can render your entire business model obsolete almost overnight. For example, the rise of digital streaming substituted traditional video rental stores, transforming the entertainment industry.

Wal-Mart’s ascent illustrates how a competitor’s massive scale and logistics innovation can disrupt retail. Similarly, the Internet’s emergence as a substitute and complementor challenged telecommunications firms, forcing them to rethink their offerings.

Recognizing which force is shifting and how dramatically it’s changing allows businesses to act before it’s too late. This requires constant market scanning, customer engagement, and openness to new business models.

By mapping these forces and their changes, companies can develop strategies to mitigate threats and leverage new opportunities, turning potential disruption into competitive advantage.

Understanding these forces prepares you for the next stage: how industries themselves morph and what that means for your business strategy.