The Porter’s Five Forces of Data

The business strategy of data

Will Murphy

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Porter’s Five Forces is a great strategic framework. We’ve used it in business strategy for years. If you aren’t familiar, it is a simple framework that helps businesspeople analyze competition within an industry created by Michael Porter. I’ve been fortunate enough to be at a business lunch with Michael Porter. This is his famous and best known business strategy framework, and I think I’d like to be the first to apply it to something I think about a lot given my background and future work — the supply chain of data.

Porter’s Five Forces from Wikipedia

Since deeper descriptions of Porter’s Five Forces are common and ubiquitous, I won’t go deep on defining them here. You can find definitions all over the place, including here.

Porter’s Five Forces can be used for older industries. But, I like to use it even for emerging industries. Looking at the five forces and speculating about how they will play out can help think about the bigger picture. So, let’s use the Porter’s Five Forces framework on data and A.I. products in general and see what we get. Each of the five forces is listed below with a few thoughts for each.

Bargaining power of the suppliers of data
Where are you getting your data from? Are you purchasing from other companies, are you collecting from customers, or are you collecting from…

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