How can porter's five forces framework be adapted to the world of Enterprise #AI services?
This week, in Brussels, after my talk, I shared an idea with a participant
How can Porter's five forces apply to product development at an Enterprise for AI services?
Porter's Five Forces is a framework developed by Michael E. Porter of Harvard Business School in 1979. It is used to analyze the industry structure and corporate strategy. The framework identifies five forces that determine the competitive intensity and, therefore, the attractiveness and profitability of an industry.
As the #aiact matures, we will see #LLMs being adapted in the Enterprise
But there is no framework to analyse the genAI industry from a corporate strategy, competitive landscape for the enterprise.
Existing enterprise AI frameworks are broad (ex from BCG ) or platform specific (ex from databricks)
Also, Porter's strategy applies to an industry level (attractiveness or otherwise) - not to a product level at an enterprise.
So, I am developing this idea further: How can porter's five forces framework be adapted to the world of Enterprise #AI services?
Whatever your view of the #aiact .. we have now gone to the next stage.
From an enterprise procurement standpoint, the #AIact is a positive because currently, there is a stalemate i.e. enterprises are fascinated by LLMs but also wary of the risks and unclear of the opportunities for them.
Here is my thinking:
1) I first proposed the analogy of a drawbridge for #generativeAI #enterprise services
2) The AI landscape is complex. Matt Turck's 2023 MAD (Machine Learning, Artificial Intelligence & Data) Landscape is a good indicator of the complexity, granularity and hierarchy of this task
3) I have been also recommending David Knott ' s work on Generative AI frameworks which form a core part of our thinking for professional enterprise AI services and finally
4) I have been collaborating with Vincent Koc on his idea of generative AI design patterns for the enterprise as a larger part of Generative AI design patterns enterprise trends
So, Porter's five forces applied to two primary players in the enterprise: suppliers and buyers. If we extend this to genAI, considering a corporate strategy, competitive landscape for the enterprise, we will
1) have many more players
2) Each with their own dynamics
designed for outputs such as
1) Market Entry or Exit Decisions:
2) Product strategy
领英推荐
3) Alliances
4) Investments
5) Acquisitions
6) IP investments
7) Cost management to reduce costs and improve operational efficiency
8) Pricing strategies
9) Recruitment and workforce reskilling
10) Customer acquisition
11) Market positioning
12) Management of disruptive trends
13) Supply chain management
14) Product market fit
15) Product design
welcome thoughts
If you found this useful, you can sign up for my book
If you are a non developer and want to learn AI with me, please see Erdos Research Labs
You can meet me and our team at our Oxford AI summit
If you would like to study with me, see our courses
Proud sponsor of AUTM | Industry & Company Insights to Close Deals Fast | ?? to Master AI Before Your Competition Does
11 个月This is a great way to analyze the effect of AI on the enterprise Ajit Jaokar! Taking the first of Porter's Five Forces, threat of new entrants (ease with which new competitors can enter the market.), I believe that AI will first increase the ease of new competitors entering the market - and will then reach a tipping point. At the tipping point, AI will act as a moat for new entrants. Why? Because right now AI tools are still being applied to low hanging fruit, including many actions or functions that can block new entrants (researching new ideas, creating initial designs, testing markets, finding new customers, etc) - especially resource poor new entrants. Everyone is still in the initial phase of learning to use these tools, so incumbents don't have an advantage. Indeed, new entrants may have an advantage in that they don't have legacy processes to overturn, and so can use AI much more efficiently. However, at some point, the AI "train" will leave the "station". Incumbents with deep experience of using AI will pull far ahead of companies who have not started using AI - or even those who haven't effectively integrated AI to their processes. It will simply be too difficult for companies to get started with AI.
Realtor Associate @ Next Trend Realty LLC | HAR REALTOR, IRS Tax Preparer
11 个月Thanks for Sharing.
Lecturer, Futurist, and Keynote Speaker | Generative AI Engineer & Technical Leader | Former Top 25 Chief Data & AI Officer
11 个月Thanks for the mention Ajit Jaokar, love how you are starting to frame everything and develop a "supply chain" understanding of generative AI for enterprise.