StrategicAnalysisofIndustry

Dynamics:
Identifyingthedriversofchange.
Assessingwhetherthedriversof
changeare,individuallyorcollectively,
actingtomaketheindustrymoreor
lessattractive.
Determiningwhatstrategychanges
areneededtopreparefortheimpacts
oftheanticipatedchange.

EvaluatingACompanys
EksternalEnvironment

Macroenvironement
Encompassesthebroad
enviromentalcontextinwicha
companysindustryissituated

TheStrategicallyRelevant
Componentsof
CompanysMacro
Environment

CORE
CONCEPT

ThinkingStrategically
AboutACompanys
IndustryandCompetitive
Environment

DoesTheIndustryOfferAttractive
OppurtunitiesForGrowth?
WhatKindsofCompetitiveForces
areIndustrymemberfacingand
howstrongiseachforces
WhatFactorareDrivingChange
industryandwhatimpactwill
thesechangehaveoncompetitive
intensityandindustryprofitability
Whatpositionsdoindustryrival
occupacywhoisstrongly
positionedandwhoisnot?
Whatstrategicmovearerivals
likelytomakenext?
Whatarethekeyfactorfor
competitivesuccessinindustry?
DoestheIndustryoffergood
prospectforattractiveprofits

MatchingStrategyto
CompetitiveConditions

CompetitivePressuresThatActto
IncreasetheRivalryamong
CompetingSellers
Buyerdemandisgrowingslowlyor
declining.
Itisbecominglesscostlyforbuyers
toswitchbrands.
Industryproductsarebecoming
morealike.
Thereisunusedproductioncapacity,
and\orproductshavehighfixedcosts
orhighstoragecosts.
Thenumberofcompetitorsis
increasingand\ortheyarebecoming
moreequalinsizeandcompetitive
strength.
Thediversityofcompetitorsis
increasing.
Highexitbarriersstopfirmsfrom
exitingtheindustry.

Pursuingavenues
thatshieldthefirm
fromasmany
competitive
pressuresaspossible.

Initiatingactions
calculatedtoshift
competitiveforcesin
thefirmsfavorby
alteringunderlying
factorsdrivingthe
fiveforces.

Spottingattractive
arenasforexpansion,
wherecompetitive
pressuresinthe
industryare
somewhatweaker.

StrategicAnalysis
ofIndustry
Dynamics:

Identifyingthe
driversofchange.
Assessing
whetherthe
driversofchange
are,individually
orcollectively,
actingtomake
theindustrymore
orlessattractive.
Determiningwhat
strategychanges
areneededto
prepareforthe
impactsofthe
anticipated
change

Economiesofscalein
production,distribution,
advertising,orotherareas
ofoperation
Experienceandlearning
curveeffects
Uniquecostadvantagesof
industryincumbents
Strongbrandpreferences
andcustomerloyalty
Strongnetworkeffectsin
customerdemand
Highcapitalrequirements
Buildinganetworkof
distributorsordealersand
securingadequatespaceon
retailersshelves
Restrictivegovernment
policies

EntryThreatConsiderations:
Strengthofbarriersto
entry
Expectedreactionof
incumbentfirms
Attractivenessofa
particularmarketsgrowth
indemandandprofit
potential
Capabilitiesandresources
ofpotentialentrants
Entryofexisting
competitorsintomarket
segmentsinwhichthey
havenocurrentpresence