Business-to-Business Marketing Models

Read this chapter to understand Porter's Model in operation. Think about a business you regularly visit, such as a grocery store or online store. Try to briefly describe the rivalries, threat of substitutes, buyer power, barriers to entry, and supplier power for the business you chose.

Other Strategic Models

The McKinsey matrix

The McKinsey matrix is a later and more advanced form of the BCG Matrix. It has several differences with BCG's matrix, as discussed below. It is illustrated in Exhibit 6.

Figure 4. McKinsey Matrix

  1. Market (Industry) attractiveness replaces market growth as the dimension of industry attractiveness. Market attractiveness includes a broader range of factors other than just the market growth rate that can determine the attractiveness of an industry/market. For example, market attractiveness could be determined using Porter's five forces model.
  2. Competitive strength replaces market share as the dimension by which the competitive position of each Strategic Business Unit is assessed. Competitive strength likewise includes a broader range of factors other than just the market share that can determine the competitive strength of a Strategic Business Unit.
  3. Finally the McKinsey matrix works with a 3x3 grid, while the BCG Matrix has only 2x2. This also allows for more insight in the analysis of the business.