1. CHAPTER -3
INDUSTRY AND
COMPETITIVE
ANALYSIS
Mohammad Mizenur Rahaman
Ph.D Researcher
Assistant Professor
Shahjalal University of Science & Technology, Sylhet
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2. Q-1: Categorizing the Objectives and
Strategies of Competitors
Competitive Strategic Market Share Competitive Strategic Competitive
Scope Intent Objective Position Posture Strategy
• Aggressive •Getting •Striving for
• Be dominant •Mostly
• Local expansion via stronger; on low-cost
leader offensive
acquisition & the move leadership
• Overtake internal •Mostly
growth •Well- •Mostly
• Regional industry focusing on a
entrenched defensive
leader market niche
• Be among • Expansion •Stuck in the •Combination •Pursuing
• National industry via internal middle of the of offensive & differentiation
leaders growth pack defensive based on
•Going after a – Quality
• Move into • Expansion •Aggressive – Service
• Multicountry different
top 10 via acquisition
position
risk-taker – Technology
superiority
• Move up a – Breadth of
• Hold on to •Struggling; •Conservative
• Global notch in product line
present share losing ground follower
rankings – Image &
• Maintain •Give up reputation
current present share – More value
•Retrenching
position to achieve for the money
to a position
short-term – Other
that can be
profits attributes
• Just survive defended
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3. Question 2: What Are the Key
Factors for Competitive Success?
l KSFs are competitive elements that most
affect every industry member’s ability to
prosper in the marketplace
4 Specific strategy elements
4 Product attributes
4 Resources
4 Competencies
4 Competitive capabilities
l KSFs spell difference between
4 Profit and loss
4 Competitive success or failure
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4. Identifying Industry
Key Success Factors
l Answers to three questions pinpoint KSFs
4 On what basis do customers choose between
competing brands of sellers?
4 What must a seller do to be competitively
successful -- what resources and competitive
capabilities does it need?
4 What does it take for sellers to achieve a
sustainable competitive advantage?
l KSFs consist of the 3 - 5 really major
determinants of financial and competitive
success in an industry 4
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5. Example: KSFs for Apparel
Manufacturing Industry
l Fashion design -- to
create buyer appeal
l Low-cost manufacturing
efficiency -- to keep selling
prices competitive
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6. Example: KSFs for Tin and
Aluminum Can Industry
l Locating plants close to end-use
customers -- to keep costs of shipping
empty cans low
l Ability to market plant output within
economical shipping distances
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7. 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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8. Question 3: Is the Industry
Attractive or Unattractive and Why?
Objective
Develop conclusions about whether the industry
and competitive environment is attractive or
unattractive, both near- and long-term, for
earning good profits
Principle
A firm uniquely well-suited in an otherwise
unattractive industry can, under certain
circumstances, still earn unusually good profits
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9. Things to Consider in
Assessing Industry Attractiveness
l Industry’s market size and growth potential
l Whether competitive conditions are conducive to
rising/falling industry profitability
l Will competitive forces become stronger or
weaker
l Whether industry will be favorably or unfavorably
impacted by driving forces
l Potential for entry/exit of major firms
l Stability/dependability of demand
l Severity of problems facing industry
l Degree of risk and uncertainty in industry’s future 9
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10. Conducting an Industry and
Competitive Situation Analysis
l 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
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Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998