FOUR CORNERS
A business model to improve an organization’s competitive strategy
Michael Porter, a professor at Harvard Business School, published his theories on how competitive forces shape strategy in the Harvard Business Review of 1979 and subsequently in his book, Competitive Strategy (1980) in which he described the Four Corners model.
The model identifies four elements that give insights into what motivates competitors to take certain actions. In the north-west corner sit the “drivers”. These are the things that motivate a competitor to act in a certain way. In the south-west corner are the “managerial biases and beliefs” of a competitor. In the north-east corner are the “strategies” of the competitor. In the south-east corner are the “capabilities” of the competitor including all its resources. These four corners come together to result in predicted actions competitors will take given certain pressures.
Competitive intelligence is vital when carrying out a Four Corners analysis.
There are many visible clues in the marketplace as to what motivates the competition. The behaviour of a company is a good indication of its motivations.