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CHAPTER -3

Mohammad Mizenur RahamanPh.D Researcher

Assistant ProfessorShahjalal University of Science & Technology, Sylhet

INDUSTRY AND INDUSTRY AND COMPETITIVE COMPETITIVE

ANALYSISANALYSIS

Published by Lecturesheet.iiuc28a9.com

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Q-1: Categorizing the Objectives and Strategies of Competitors

Competitive Scope

Strategic Intent

Market Share Objective

Competitive Position

Strategic Posture

Competitive Strategy

• Local• Be dominant leader

• Aggressive expansion via acquisition & internal growth

•Getting stronger; on the move

•Mostly offensive

• Regional• Overtake industry leader

•Well-entrenched

•Mostly defensive

• National• Be among industry leaders

• Expansion via internal growth

•Stuck in the middle of the pack

•Combination of offensive & defensive

• Multicountry• Move into top 10

• Expansion via acquisition

•Going after a different position

•Aggressive risk-taker

• Global• Move up a notch in rankings

• Hold on to present share

•Struggling; losing ground

•Conservative follower

• Maintain current position

•Give up present share to achieve short-term profits

•Retrenching to a position that can be defended• Just survive

•Striving for low-cost leadership

•Mostly focusing on a market niche

•Pursuing differentiation based on– Quality– Service– Technology superiority– Breadth of product line– Image & reputation– More value for the money– Other attributes

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Question 2: What Are the Key Factors for Competitive Success?

KSFs are competitive elements that most affect every industry member’s ability to prosper in the marketplace Specific strategy elements Product attributes Resources Competencies Competitive capabilities

KSFs spell difference between Profit and loss Competitive success or failure

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Identifying IndustryKey Success Factors

Answers to three questions pinpoint KSFs On what basis do customers choose between

competing brands of sellers? What must a seller do to be competitively

successful -- what resources and competitive capabilities does it need?

What does it take for sellers to achieve a sustainable competitive advantage?

KSFs consist of the 3 - 5 really major determinants of financial and competitive success in an industry

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Example: KSFs for Apparel Manufacturing Industry

Fashion design -- to create buyer appeal

Low-cost manufacturing efficiency -- to keep selling

prices competitive

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Example: KSFs for Tin and Aluminum Can Industry

Locating plants close to end-use customers -- to keep costs of shipping empty cans low

Ability to market plant output within economical shipping distances

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Strategic Management Principle

A sound strategy incorporates

efforts to be competent on all

industry key success factors and

to excel on at least one factor!

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Question 3: Is the IndustryAttractive or Unattractive and Why?

Develop conclusions about whether the industry and competitive environment is attractive or

unattractive, both near- and long-term, for earning good profits

Objective

Principle

A firm uniquely well-suited in an otherwise unattractive industry can, under certain

circumstances, still earn unusually good profits

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Things to Consider inAssessing Industry Attractiveness

Industry’s market size and growth potential Whether competitive conditions are conducive to

rising/falling industry profitability Will competitive forces become stronger or

weaker Whether industry will be favorably or unfavorably

impacted by driving forces Potential for entry/exit of major firms Stability/dependability of demand Severity of problems facing industry Degree of risk and uncertainty in industry’s future

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Conducting an Industry andCompetitive Situation Analysis

Two things to keep in mind:

1. Evaluating industry and competitive conditions cannot be reduced to a formula-like exercise--thoughtful analysis is essential

2. Sweeping industry and competitive analyses need to done every 1 to 3 years