Reflecting on your learning so far
This week, we studied macro analysis. We discussed how to evaluate industrial attractiveness by examining five competitiveness forces. Five forces is an important tool that allows us to analyse the industrial environment, position our firm, and formulate strategy.
Remember, the key to success is to identify the niche in which you have dominant power over the competitor buyer and supplier, where there is less competition, and where the threat of entry and the substitute brand is competitively lower.
We also looked at the industrial lifecycle, examining how the market environment and level of competition can vary across the start-up, growth, maturity and decline stages of the lifecycle. We also addressed how a sound understanding of which stage the industry is currently at plays an important role in designing competitive strategies.
Finally, we learned how to identify our direct competitors using strategic group analysis. This helps us examine the industrial structure and address the value of market segmentation. Also, do remember that the strategic group formation may vary using different strategic dimensions. It is important to adopt multiple dimensions to identify who is the most ‘dangerous’ competitor.
Coming up next
The next course in the Strategy and Decision Making program is Internal Analysis where you will:
- Investigate Michael Porter’s 5 Forces framework
- Explore the five stages of the industry life cycle
- Define strategic group analysis, as a way of learning who the competitors are within a specific market industry
To complete this week and the course, our final task for you is to gauge your understanding of macro analysis and the impact of formal and informal institutions.
Using a company you have experience of, discuss how formal and informal institutions influence the company’s strategy and behaviour?
Leave your comments in the discussion area and please be sure to engage with your fellow learners.
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