Industry Analysis and competitive

Analysis.
 Objective: For designing viable strategies a firm
require a thorough understanding of the firm’s
industry and competition.
 Firm’s strategist need to address the following
question before formulating their strategies.
A. What are the boundaries of the industry?
B. What is the structure of the industry?
C. Which firms are our competitors.?
D. What are the major determinants of competition?
 Industry boundaries
 It helps executives to determine the arena in
which the firm is operating and competing.
 It focuses attention on firms competitors and
their products/services.
 It helps to determine the key factors for
success
 A basis on which executive evaluate their
firms goals.
 Problem in defining industry
Boundaries
 Continuous evolution of industries over time
create new opportunities and threats.
 Industrial evolution creates industries within
industries (Electronic industry )
 Industries are becoming global in scope.
 Developing a realistic Industry
boundaries
 Executive need to examine these five issues for that purpose
A. Which part of industry corresponds to our firm’s goals?
B. What are the key ingredients of success in that part of the
industry?
C. Does the firm has the skill to compete in that part of the
industry?
D. Will the skills enable to seize emerging opportunities and
deal with future ?
E. Is the definition of industry is flexible enough to allow
necessary adjustment?
 Industry structure
 Structural attributes of an industry are the enduring
characteristics that reflects its distinctive character
over time.
 There are four variables which determines the
structure of the industry
A. Concentration
B. Economy of scale. (achieved due to increased
volume of production)
C. Product differentiation
D. Barriers to entry.
 Operating Environment
A. Competitive position
B. Customer profile
C. Suppliers
D. Creditors
E. Human resources