Michael Porter met Jose Rizal

In the Harvard Business Review (HBR) publication of Michael Porter, he gave a brief idea of the five forces model. Every business aimed to sustain its activities' profitability, which required a strategic response to the competition. “Keep your friends close, but your enemies closer” is the best frame of mind to monitor rivals. As an update to Mr. Porter’s 1979 HBR article, he identified four more forces that can harm future business prospects.

Knowledgeable buyers can play your business against your competitors. The buyer is maximizing their power to bid prices down, mainly if the buyer relies on economies of scale. These buyers tend to pit one business against similar businesses in the industry. Remember, during intramurals, t-shirt printers form a queue of colleges applying to be the exclusive supplier. A savvy CSG officer can play one printer against their rivals.

The dominant supplier can charge higher prices, squeezing your profit, mainly if they are a monopoly (single seller). Notice how customers of power utilities complain about the surge in their electricity bills for the month while staying connected with the same power utility. Similarly, China can leverage the US in its trade war on the supply of rare earths used to manufacture electronics since China already cornered the rare earth source and supply chain.

Aggressive new players equipped with modern technology and aspiring to enter the new market can force businesses to increase capitalization to level with the competition. In an industry where new players have easy access, the company is more likely to lose its market share.

The force of product substitution can drive your customers to the arms of your rivals. The sports footwear industry is very stiffly competitive. There are innovative products that competitors launched to undermine market share. The market continually shifts due to the high demand for innovation, and the customer can readily change from one brand to the next.

Nonetheless, Mr. Porter offers guidance to businesses to leverage against competitors; the first is to position the business where the forces are weakest. For instance, Mr. Porter continued that the heavy-truck industries require large fleets and tend to bid down truck prices. However, truck manufacturers need to follow government regulatory standards; thus, they offer almost similar features. Hence, prices tend to be the same among competitors. However, in the case of Paccar, the company built their truck for a selected target customer, the single driver who owns their trucks. Paccar offers the driver-owner personalized features where customers can choose from thousands of options ranging from colors to luxurious sleeping cabins. The company has been so successful that it claims continuous profit for the last 68 years with a return on investment above 20% annually.

“Seek, and you shall find,” this is the truth in the gospel and true in competition. Businesses that seek to improve their profitability always find the answer. If this is true today, it was over a hundred years ago. A man of many projects demonstrated that social entrepreneurship was the key to the country's economic development.

Jose Rizal, a man of destiny, is more relevant today than 150 years ago. He died for our freedom, but equally important, he lived for us. Rizal was already famous before his martyrdom and became more popular after his death. The popularity of Rizal transcends through time and space. So many people, places, and products were named after him. Let us start with places: a province, several avenues and streets, and numerous plazas and parks were named after him. There are three Rizal Parks in the Davao Region alone—a hero honored in other countries. Rizal Park in China and Germany proves he is a hero for humanity. Several schools were named after him and a bank. Most of all, a religious movement, the Rizalista, considered him divine. So many things were written about him as a hero, poet, physician, scientist, linguist, and lover, but seldom as an entrepreneur.

Unknown to many of us, Rizal was a social entrepreneur. He made several successful business ventures during his exile in Dapitan. Notably, Rizal noticed that the middlemen of abaca and copra (primarily Chinese) exploit farmers in Dapitan to help them Rizal organize a farmer’s cooperative. With a partner, he used his winnings in lotto (yes, Rizal bet in lotto) to trade in abaca and copra. Rizal started and finished so many projects. He built a water system in Dapitan to provide people with clean water. He built a relief map of Mindanao in front of the Church of St. James. It is still there. Rizal tried to drain the marshes to eliminate mosquito-borne diseases such as malaria and dengue. He built several bamboo and nipa houses to teach and train young boys in math, science, physical education, and arts for free. Already a famous physician at that time, he did not charge payment for his services and even distributed medicine for free.

There was no idle time for Rizal. He planted fruit trees, carved wood, and strolled the beach with his dog. While in Dapitan, he fell in love with Josephine, who bore him a son named Francisco. The baby died several hours after birth. Rizal was not spared from gossip. He and Josephine lived as man and wife without the sacrament of marriage from the Church. On top of that, his family was against their relationship.

These events showed that Rizal was human. Nonetheless, Rizal did not fail to show us that we can become the master of our fate. He did not ask for anything from the government. Rizal's projects were not for himself. It was for the community. When people realized that community development was in their hands, they volunteered to help themselves. Help comes to those who help themselves. Again, the Philippines is at the crosshairs of a major global conflict with the volatile situation in the West Philippine Sea, trapped between two opposing Titans, China and the US. Security analysts predict World War 3 will likely start in the South China Sea. If Rizal were still alive today, what do you think he would do?

Reference

Habaradas, R. (22, September 2014). Rizal: Social Entrepreneur. The Manila Times. Retrieved from https://www.manilatimes.net/2014/09/22/business/columnists-business/rizal-social-entrepreneur/128676/

Porter, M.E., 2008. The five competitive forces that shape strategy.Harvard business review,86(1), pp.25-40.