Published by:
Indiana University
Length: 8 pages
Abstract
Today''s strange, new business world needs an augmented model of industry and market analysis that reflects recent developments in industry dynamics, such as globalization, entrepreneurship, technological advances, and the Internet. Here is such an updated model, built on and expanding the basic premises that underlie Michael Porter''s Five Competitive Forces Model. Suggestions are offered for how managers can position their businesses for success in the current competitive environment. Competitive rivalry (the force with the greatest influence on ROI and risk) includes both substitute products and the threat of potential entrants, combined because they are so highly interrelated. The presence of durable barriers to imitation is the most powerful deterrent to destructive turbulence. Strategic positioning in competitive markets requires creating a market-focused organization, a new market space, and relationships with key customers and suppliers. Strategy must be conceived as a series of real options.
About
Abstract
Today''s strange, new business world needs an augmented model of industry and market analysis that reflects recent developments in industry dynamics, such as globalization, entrepreneurship, technological advances, and the Internet. Here is such an updated model, built on and expanding the basic premises that underlie Michael Porter''s Five Competitive Forces Model. Suggestions are offered for how managers can position their businesses for success in the current competitive environment. Competitive rivalry (the force with the greatest influence on ROI and risk) includes both substitute products and the threat of potential entrants, combined because they are so highly interrelated. The presence of durable barriers to imitation is the most powerful deterrent to destructive turbulence. Strategic positioning in competitive markets requires creating a market-focused organization, a new market space, and relationships with key customers and suppliers. Strategy must be conceived as a series of real options.