Industry Analysis And Competitive Analysis

Industry Analysis and competitive Analysis. 

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C. D. E. F.

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. What are the boundaries of the industry? What is the structure of the industry? Which firms are our competitors.? What are the major determinants of competition?

Industry boundaries 

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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 

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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 

B. C. D. E. F.

Executive need to examine these five issues for that purpose Which part of industry corresponds to our firm’s goals? What are the key ingredients of success in that part of the industry? Does the firm has the skill to compete in that part of the industry? Will the skills enable to seize emerging opportunities and deal with future ? Is the definition of industry is flexible enough to allow necessary adjustment?

Industry structure 

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C. D. E. F.

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 Concentration Economy of scale. (achieved due to increased volume of production) Product differentiation Barriers to entry.

Operating Environment A. B. C. D. E.

Competitive position Customer profile Suppliers Creditors Human resources