Sign Industry Evaluation: Porter’s Competitive Forces Analysis Highlights Signworld’s Strengths

Sign Industry Evaluation: Porter’s Competitive Forces Analysis Highlights Signworld’s Strengths

Today’s post uses Porter’s Competitive forces framework to explain the value of our business model for new entrants. Read on to learn how we help sign shop partners overcome entry barriers and avoid the “race to the bottom,” while self-starters are left to face the full power of our industry’s competitive pressures.

Signworld Moderates The Risk Of Entry By Potential Competitors

Porter states that profitable industries attract more competitors, which can limit all players’ profitability and reduce market share.

But according to the Sign Research Foundation’s Annual Report, entry barriers abound for self-starters in the sign industry. Among the top-10 challenges facing sign professionals, researchers named the following common entry barriers:

  1. Educating/onboarding new employees
  2. Understanding emerging trends in technology and materials
  3. Learning about trends and standards in brightness and illumination
  4. Financing new signage materials and technology
  5. Learning local sign code requirements

While these obstacles might stop potential entrants in their tracks, none of them affect our partners. Indeed, since 2006, Signworld has been making it easier than ever for new sign shop owners to gain entry to the lucrative sign industry. We simplify employee onboarding with our finely tuned training system, owner’s forum, and digital learning resources; our start-up packages come complete with all the latest sign tech and eco-friendly materials; we keep owners apprised of emerging trends via our weekly webinars and annual convention; we get all sign partners exclusive access to supply discounts to help finance new sign tech; and we teach you everything you need to know about local sign code.

Ultimately, it’s a win-win proposition for Signworld partners—our partners leap past all the common entry barriers facing the general public, while those same barriers help protect your market share from those outside our alliance!

Signworld Eliminates The “Intensity Of Rivalry” Among Allies

According to Porter’s model, the more intense the rivalries between established companies, the harder it is for new entrants to gain a foothold, and the greater the limits of all players’ profitability, as big brands ruthlessly undercut each other in a “race to the bottom.”

The intensity of rivalry in the sign industry is decidedly mixed. On one hand, the sign industry is an interdependent or “consolidated” industry in which the actions of competitors (e.g. undercutting) affect all players’ market share and profitability, which typically leads to increased rivalry. On the other hand, signage has high and resilient demand—especially during COVID-19, where safety signage is mandatory for safe continuity—which moderates the intensity of rivalry among competitors.

Though the intensity of rivalry may be cause for concern among independent shops, Signworld partners have very little to fear. That’s because:

  • The Signworld territory system guarantees exclusive sales rights to a contiguous cluster of zip codes which contains up to 3000 businesses—no other Signworld partner will sell in this area
  • The Signworld business alliance creates favorable cost conditions, giving partners exclusive access to supply discounts to protect them from undercutting strategies
  • Signworld partners work together, sharing tips on the Owner’s forum and passing projects back and forth when outsourcing is needed, rather than cranking up competitive pressure

In this way, we give our partners the best of both worlds, reducing intra-alliance rivalry while those outside the Signworld family “race to the bottom.”

Learn More About The Signworld Business Alliance

Call 888-765-7446 or visit the Signworld business alliance website to learn more about how we reduce entry barriers and competitive pressures for our partners.

Back