Competitive jockeying among industry rivals is ever changing, as fresh offensive and defensive moves are initiated and rivals emphasize first one mix of competitive weapons and tactics, then another.
The threat of entry is stronger when entry barriers are low, when there's a sizable pool of entry candidates, when industry growth is rapid and profit potentials are high, and when incumbent firms are unable or unwilling to vigorously contest a newcomer's entry.
The stronger the forces of competition, the harder it becomes for industry members to earn attractive profits.
A company's strategy is increasingly effective the more it provides some insulation from competitive pressures and shifts the competitive battle in the company's favor.
The driving forces in an industry are the major underlying causes of changing industry and competitive conditions— some driving forces originate in the macroenvironment and some originate from within a company's immediate industry and competitive environment.
Strategic group mapping is a technique for displaying the different market or competitive positions that rival firms occupy in the industry.
A strategic group is a cluster of firms in an industry with similar competitive approaches and market positions.
Driving forces and competitive pressures do not affect all strategic groups evenly. Profit prospects vary from group to group according to the relative attractiveness of their market positions.
Good scouting reports on rivals provide a valuable assist in anticipating what moves rivals are likely to make next and outmaneuvering them in the marketplace.
Key success factors (KSFs) are the product attributes, competencies, competitive capabilities, and market achievements with the greatest impact on future competitive success in the marketplace.
A sound strategy incorporates the intent to stack up well on all of the industry's KSFs and to excel on one (or two) in particular.
The degree to which an industry is attractive or unattractive is not the same for all industry participants and all potential entrants; the opportunities an industry presents depends partly on a company's ability to capture them.
