Porter’s Four Corners Revisited

Michael Porter’s Four Corners Model is a great tool that is used for better clarity of competitive intelligence (CI), as compared to a SWOT Analysis. Although the Four Corners Model has been around for some time, it is just beginning to become accepted as the go to method of forecasting the competitions next moves. As part of any great CI analysis process, using the Four Corners Model will allow companies to get actionable data on the direction that their competition is headed. This is an advantage over the widely adopted model of the snapshot or static view that can be provided by a SWOT analysis; competitor’s strengths, weaknesses, opportunities, and threats.

By tying the capabilities of a competitor to their underlying motivations for business success, the Four Corners Model is able provide the necessary and actionable CI information with remarkable success. Unlike the SWOT analysis that only gives you snapshot, albeit a very valuable glimpse, the Four Corners Model is able to give a trend or predictive value of your competition’s possible course of action. Drawing the data and analysis from financial goals, company culture, past business philosophies, current organizational structure, and all of the other relevant CI sources, the model is able to trend the competitor’s strengths, weaknesses, perceived culture, values, and assumptions on their current goals.

By looking at the motivations, capabilities, and assumptions, the Four Corner’s Model for CI analysis can provide organizations with actionable predictions of the future actions or reactions of one or more of their competitors. The accuracy of these predictions depend on the overall quality of data that is put into the analysis, as well as the volume of data. As with any analysis, the key component to accuracy of the end product, is the accuracy of the input data. Using the Four Corner’s Model in combination with the SWOT analysis and a range of other CI analysis tools will give the best results, and provide your company with a range of actionable data regarding your competitors.

Working to develop a competitive intelligence process that includes the Four Corner’s Model will ensure that you have at least one predictive tool available. While it is great to know what your competition is doing at the present moment, it is even more valuable to have an idea of what they are going to do next, and how they would/will react in the future. It is important to iterate often with your CI process, so that you can have the very best actionable information when you need it to make the most educated decisions.