Competitive jockeying among
industry rivals is ever changing,
as fresh offensive and defensive
moves are initiated and
rivals emphasize first one mix
of competitive weapons and
tactics, then another.
The threat of entry is stronger
when entry barriers are low,
when there's a sizable pool of
entry candidates, when industry
growth is rapid and profit
potentials are high, and when
incumbent firms are unable or
unwilling to vigorously contest
a newcomer's entry.
The stronger the forces of competition,
the harder it becomes
for industry members to earn
attractive profits.
A company's strategy is increasingly
effective the more it
provides some insulation from
competitive pressures and
shifts the competitive battle in
the company's favor.
The driving forces in an industry
are the major underlying
causes of changing industry
and competitive conditions—
some driving forces originate in
the macroenvironment and
some originate from within a
company's immediate industry
and competitive environment.
Strategic group mapping is a
technique for displaying the different
market or competitive
positions that rival firms occupy
in the industry.
A strategic group is a cluster
of firms in an industry with similar
competitive approaches and
market positions.
Driving forces and competitive
pressures do not affect all
strategic groups evenly. Profit
prospects vary from group to
group according to the relative
attractiveness of their market
positions.
Good scouting reports on rivals
provide a valuable assist in anticipating
what moves rivals are
likely to make next and outmaneuvering
them in the
marketplace.
Key success factors (KSFs)
are the product attributes, competencies,
competitive capabilities,
and market achievements
with the greatest impact on future
competitive success in the
marketplace.
A sound strategy incorporates
the intent to stack up well on all
of the industry's KSFs and to
excel on one (or two) in
particular.
The degree to which an industry
is attractive or unattractive
is not the same for all industry
participants and all potential
entrants; the opportunities an
industry presents depends
partly on a company's ability to
capture them.
