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.
C. What are the boundaries of the industry?
D. What is the structure of the industry?
E. Which firms are our competitors.?
F. 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
B. Which part of industry corresponds to our firm’s
goals?
C. What are the key ingredients of success in that
part of the industry?
D. Does the firm has the skill to compete in that
part of the industry?
E. Will the skills enable to seize emerging
opportunities and deal with future ?
F. 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
C. Concentration
D. Economy of scale. (achieved due to
increased volume of production)
E. Product differentiation
F. Barriers to entry.
 Operating Environment
A. Competitive position
B. Customer profile
C. Suppliers
D. Creditors
E. Human resources