Business Strategy Chapter 4 What Factors Are Driving Industry Change and What Impacts Will They Have?

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Slide 1: Question 3:  What  Factors  Are  Driving  Industry  Change  and  What  Impacts  Will  They  Have?

•Industries change because forces
are driving industry participants
to alter their actions

•Driving forces are the
major underlying causes
of changing industry and
competitive conditions

•Where do driving forces originate?

–Outer ring of macroenvironment

–Inner ring of macroenvironment

Slide 2: The most common driving forces. 

Slide 3: Question 4:  What  Market  Positions Do  Rivals  Occupy?

•One technique to reveal
different competitive positions
of industry rivals is
strategic group mapping

•A strategic group is a
cluster of firms in an industry
with similar competitive
approaches and market positions

Slide 4: Strategic  Group  Mapping

•Firms in same strategic group have two or more competitive characteristics in common

–Have comparable product line breadth

–Sell in same price/quality range

–Emphasize same distribution channels

–Use same product attributes to appeal
to similar types of buyers

–Use identical technological approaches

–Offer buyers similar services

–Cover same geographic areas

Slide 5: Question 5:  What  Strategic  Moves  Are Rivals  Likely  to  Make Next?

•A firm’s best strategic moves are affected by

–Current strategies of competitors

–Future actions of competitors

•Profiling key rivals involves gathering
competitive intelligence about

–Current strategies

–Most recent actions and public announcements

–Resource strengths and weaknesses

–Efforts being made to improve their situation

–Thinking and leadership styles of top executives

Slide 6: Competitor  Analysis

•Sizing up strategies and competitive strengths and weaknesses of rivals involves assessing

–Which rival has the best strategy? Which
rivals appear to have weak strategies?

–Which firms are poised to gain
market share, and which ones
seen destined to lose ground?

–Which rivals are likely to rank among the industry leaders five years from now?  Do any up-and-coming rivals have strategies and the resources to overtake the current industry leader?

Slide 7: Question 6:  What  Are  the  Key Factors  for  Competitive  Success?

•KSFs are those competitive factors most affecting every industry member’s ability to prosper

•KSFs concern

–Specific strategy elements

–Product attributes

–Resources

–Competencies

–Competitive capabilities

  that a company needs to be competitively successful

•KSFs are attributes that spell the difference between

–Profit and loss

–Competitive success or failure

Slide 8: Common types of industry key success factor.

Slide 9: Question 7:  Does  the  Outlook  for  the  Industry  Present  an  Attractive  Opportunity?

}Involves assessing whether the industry
and competitive environment is attractive
or unattractive for earning good profits

}Under certain circumstances, a firm uniquely
well-situated in an otherwise unattractive industry can still earn unusually good profits

}Attractiveness is relative, not absolute

}Conclusions about attractiveness have
to be drawn from the perspective of a
particular company.