Jacko | Director at GBC | 3 min read | September 02
Frameworks such as PESTEL, five forces analysis, driving forces, strategic group maps, competitor analysis, and critical success factors provides a useful perspective on an industry’s outlook for future profitability. Putting them all together provides an even richer and more nuanced picture. Thus, the final step in evaluating the industry and competitive landscape of your company is to use the results of the analysis performed in answering six key questions to determine whether the industry presents your company with strong prospects for competitive success and attractive profits. The important factors on which to base a conclusion include:
- How your company is being impacted by the state of the macro-environment.
- Whether strong competitive forces are squeezing industry profitability to sub-par levels.
- Whether industry profitability will be favourably or unfavourably affected by the prevailing driving forces.
- Whether your company occupies a stronger market position than rivals.
- Whether this is likely to change in the course of competitive interactions.
- How well your company’s strategy delivers on the industry critical success factors.
As a general proposition, the anticipated industry environment is fundamentally attractive if it presents your company with good opportunity for above-average profitability; the industry outlook is fundamentally unattractive if a your company’s profit prospects are unappealingly low. Also important to note is that the degree to which an industry is attractive or unattractive is not the same for all industry participants and all potential entrants.
I hope you enjoyed this short thought-leadership piece. Much love…from GBC. 🙂
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