Reflecting on your learning so far

This week, we have studied micro analysis.

We discussed how to evaluate industrial attractiveness by examining Porter’s 5 Forces, an important tool for analysing the industrial environment. It helps to position our firm, and form strategy and profitability.

Remember, the key to success is to identify the niche where you have dominant power over the buyer and supplier, where you have less competition, and where the threat of entry and substitute is low.

We also looked at industrial life cycle. The market environment and level of competition vary across start-up, growth, shake-out, maturity and decline stages of the life cycle. Understanding the stage the industry is currently at plays the important role in designing the competitive strategies.

Finally, we learned how to identify our direct competitors using strategic group analysis. This tool helps us examine the industrial structure and address the value of market segmentation. Please note, the strategic group formation may vary using different strategic dimensions. It is important to adopt multiple dimensions to identify the most ‘dangerous’ competitor.