Porter's Five Forces and Why You Shouldn't Be an Influencer / KOL (220)

Sep 6, 2024

Michael Porter, a renowned strategist and creator of the Five Forces framework, discusses the nuances of influencer marketing. He breaks down the challenges influencers face in a competitive digital landscape, emphasizing sustainability. The conversation also highlights the importance of content and customer engagement in building loyalty. Furthermore, Porter shares a memorable encounter with whale sharks, drawing parallels between nature and the influencer industry, and suggests a Netflix series that explores these dynamics.

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INSIGHT

Five Forces Expose Influencer Fragility

Michael Porter's Five Forces quickly reveals influencer businesses are structurally weak.
Applying the framework shows why standalone influencer models rarely make durable companies.

ANECDOTE

Ruhnn's Hit-Driven Revenue Concentration

Ruhnn Holding built a business around a few breakout influencers and scaled into an agency and e-commerce.
The company relied heavily on one or two people for over half its revenue, which proved unstable.

INSIGHT

Influencers Enable Networked Word-Of-Mouth

Influencers activate consumer-to-consumer connections rather than brand-to-consumer broadcasts.
That networked activation is more powerful than traditional one-way marketing for driving attention.

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This week’s podcast is about Ruhnn Holding, KOLs / Influencers and Michael Porter's Five Forces.

You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.

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Concentration of buyers:
Purchase size:
Differentiation of products or services:
Switching costs
Price sensitivity:
Informed buyers:

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Number of competitors:
Industry growth rate:
Fixed costs:
Exit barriers:
Undifferentiated products / services:

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Economies of scale:
Product differentiation:
Capital requirements:
Access to distribution channels.
Government regulations:
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Availability of substitutes
Availability of close substitutes (i.e., “the sense that products are similar”):
Relative price performance:
Customer willingness to go elsewhere:

Here are some factors to consider for Supplier Power.

The number and concentration of suppliers:
Uniqueness and differentiation:
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Forward integration:
Industry importance:

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