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What is Four Corner's Analysis?

  • Kumar Ayush
  • Oct 25, 2021
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Four Corner's Analysis


Four Corner's Analysis is a framework developed by Shervin Pishevar and Michael Norton for identifying and describing the critical success indicators for developing new ideas in the marketplace. 


Business analysts are often called upon to use analytical frameworks to learn and remember the primary key success factors for realizing competitive advantage.


The first step in developing a successful product is to understand the customer's needs and preferences. This step, in turn, is based upon an understanding of the market structure. A market has many shapes and sizes, and there are many potential competitors in the market. 


For each product, there is a particular market area that encompasses the majority of the target audience or purchasers. Each product type and each configuration have unique features which distinguish it from the competition. 


(Also read: Cost-benefit analysis)


The four-corner framework then helps identify where a product is positioned within the market and what kind of positioning it has to become number one in that market segment.


Based upon this information, the four-corner analyst identifies the segments which need to be targeted. 


  1. A user does this by developing four central thesis or categories into which the market can be divided. The details can be broken down according to product type, market segment, or pricing and marketing context. 

  2. Once these categories or thesis have been identified, the four-corner analyst proceeds to the next step. 

  3. This next step is to research the available data to find out the product's strengths and weaknesses. 

  4. Then, using this information, the analyst can develop a marketing strategy to target these key factors and create a competitive plan to serve the needs of his customer segment.


(Must read: A BCG matrix model)


Focus Area of Four Corner's Analysis


Four Corner's Analysis identifies four key points or focuses areas that need to be analyzed correctly. These focus areas are profit, cost, place, and Motivation. 


  • The first three are very obvious, and the analysis will more than likely revolve around product type, market segment, and price. 

  • The last two focus on the individual attributes of the product or what the company is trying to accomplish. These areas are equally important, but in a different manner.


Profit is determined by the product type, market segment, and price. Price is primarily dependent on the product configuration, brand name, promotion, and other factors. The place is all about the company and how it benefits the market segment. This focus involves everything from research to product packaging design to advertisements and promotions.


Analysis of the four corners involves looking into the customer segment of each of these focus areas. Each focus area will help a company analyze what the pieces want and need. This allows a company to realize how to serve, where to advertise, and make their product unique to appeal to the market and gain their loyalty.


The other aspect of Four Corner's Analysis is marketing. Marketing is the strategy and tactics of promoting the product in the right way to gain the most significant advantage over the competition. It combines advertising and a promotional system designed to attract customers to the development and encourage repeat sales. 


(Related blog: 5 Marketing Management Goals)


Marketing is an ongoing effort that must be consistent and ongoing if a company is going to succeed. Marketing is the key to making money with any business and with any product.


There are four major product types. The most popular are automobiles, computers, consumer durables, and consumer goods. The automobile segment is a high-volume market that includes both new and used cars. 


The computer product type includes laptops, desktops, and netbooks. Durables include all kinds of products that deal with the human body, such as eyewear, gloves, and footwear.


(Recommended blog: List of Digital Marketing Channels for Businesses)


Components of Four Corner's Analysis


Four Corners Analysis is a powerful tool for identifying competitors and their plans. The analysis focuses on four corner strategies; deterrence, confrontation, preemptive and offensive deterrence. 


Each of these strategies has distinct characteristics. An investigation must be made to determine if the company's plans align with its competitors and if the company can maintain its competitive advantage in the market. 


  1. Deterrence: 


A crucial component of the four corners analysis is deterrence. It is the ability to effectively manage the effects of competitor activity on the strategic balance. In this section, all possible future threats and actions which could affect the competitive environment are analyzed. 


This section will include the assessment of the effect of competitors adopting new technologies, creating new market segments, merging with or acquiring other companies, expanding into new areas, and other such actions.


By considering the following points, we may brainstorm by considering the effect on our company of any changes in the market environment. Our analysis focuses on whether the competition can reduce our market share. 


The first step is to identify and measure, through research, the competition's current size, scale, scope, and scope. Then we must determine if the competitors can adopt new approaches or adapt existing strategies which reduce our market share. 


Finally, we must assess whether the competitors can adjust to our company's new design or successfully adapt to the new management assumptions.


  1. Conflict:


In assessing whether competitors can reduce our market share, we must investigate whether we can reduce their current competitive advantage. We do this by analyzing if the competitors have policies, procedures, structures, and plans that we can adopt to reduce our competitive advantage.


A successful implementation requires a clear identification of all four corners targets and actions, a clear definition of the scope of the four corners target, and an assessment of the costs and benefits of each step. 


Furthermore, we need to measure, over time, the impact of these actions on the reduction of our competitive advantage.

  1. Outcomes


When we discuss components of the four corners strategy, we describe an objective fact about our company. It is an economic reality about the business that can be measured in terms of cost savings, reduced customer cost, increased market share, or other factors. 


We then must evaluate these components of our current strategies and evaluate them against their potential impact on our company.


Four Corner Analysis: Advantages 


If you've been in business for any amount of time, then you've probably heard of this term and wondered how it applies to your own business. The main reason this analysis is critical is that it allows you to look inside the minds of competitors and see what your own company's plan and vision are. 


Therefore, the advantages of using this method in business are that you can get a better understanding of precisely what competitors see when they look at their competition. You can use this information to help craft your strategy and tactics.


The first of the four corners to focus on is Motivation. Many companies will put a great deal of effort into finding out what drives their customers to purchase their products and to devise strategies around that. While these are important considerations, you should also consider what goes to you as a business owner. 


Are you motivated by the idea of making more money, or are you more driven by the idea of giving your customers what they want? You'll find that both of these drives are important to your success when you think about it. 


One of the advantages of this analysis is that it can help you identify whether you're driven more by what you want out of life than what you need out of life.


The next of the four corner analysis advantages is to look at the drivers of your company's current strategy and tactics. In doing so, you can quickly begin to figure out what has worked in the past and what has not. 


For example, suppose a particular marketing campaign has been effective for your competitors but is not working for you currently. In that case, you might want to adjust your tactic to make it more effective. 


This analysis can be instrumental if you're starting your own business because it allows you to start innovating to quickly increase your company's bottom line.


(Also Read: MOST Analysis- A Business Success Tool)


Four Corner Analysis: Disadvantages


Four Corner Analysis is a well-known process in analyzing financial documents known as Statement of Entities (SOE). Financial accounting has been with us for a long time. 


Still, it has also evolved with the use of computer programs and many new software programs that allow people to produce tax-efficient financial statements. What are the disadvantages of the Four Corner Analysis? You will find that it is not as simple and easy as most people make it out to be.


The disadvantages of this analysis method are that there is no room for error, and you cannot take the results for granted. 


Four Corner Analysis requires a great deal of care on your part. There are so many things to look out for, and you must analyze the data systematically and carefully. 


If you can do this, you will have no worries about the disadvantages of the four-corner analysis. You have to have a proper understanding of financial statements before attempting this analysis because there is a lot to learn about this method.


In addition, Four Corner Analysis has its drawbacks because this method requires a lot of your time and effort. You must know how to analyze financial statements, and you also need to follow the rules and regulations set by accounting standards. 


You should also be aware that the results you get are only as good as your skills. So, if you want to work on the advantages of four corner analysis, you must know how to handle your skills and get the results you want.


(Recommended blog: Techniques Used in Business Analytics Framework)




The four corner's analysis model is one such tool used to identify business strategy based upon information accumulated through market research


Using this model, analysts can look at a product's history, competitors, marketing, and place in the overall marketplace and look for key areas of strength and weakness that can be exploited to create a competitive edge.