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Core Concepts
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Competitive jockeying among industry rivals is ever changing, as rivals initiate fresh offensive and defensive moves and emphasize first one mix of competitive weapons and then another in efforts to improve their market positions.

High entry barriers and weak entry threats today do not always translate into high entry barriers and weak entry threats tomorrow.

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.

Industry conditions change because important forces are driving industry participants (competitors, customers, or suppliers) to alter their actions; the driving forces in an industry are the major underlying causes of changing industry and competitive conditions—they have the biggest influence on how the industry landscape will be altered. Some driving forces originate in the outer ring of macro environment and some originate from the inner ring.

An important part of driving forces analysis is to determine whether the collective impact of the driving forces will be to increase or decrease market demand, make competition more or less intense, and lead to higher or lower industry profitability.

Driving-forces analysis, when done properly, pushes company managers to think about what's around the corner and what the company needs to be doing to get ready for it.

The real payoff of driving-forces analysis is to help managers understand what strategy changes are needed to prepare for the impacts of the driving forces.

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 industry rivals that have similar competitive approaches and market positions.

Strategic group maps reveal which companies are close competitors and which are distant competitors.

Not all positions on a strategic group map are equally attractive.

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.

Today's market leaders don't automatically become tomorrow's.

Managers who fail to study competitors closely risk being caught napping when rivals make fresh and perhaps bold strategic moves.

Key success factors 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 key success factors and to excel on one or two KSFs.

The degree to which an industry is attractive or unattractive is not the same for all industry participants and all potential entrants; the attractiveness of the opportunities an industry presents depends heavily on whether a company has the resource strengths and competitive capabilities to capture them.

 








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