How are competitors affected differently?
Not all competitors will be affected equally by
changes of industry structure. Strategic group analysis is helpful when: barriers are rising
(higher R&D or marketing costs) or when the buyers power is rising it hurts always the small
Lastly there is to remember that the five forces analysis is useful not only for the private
sector but also for the public and charity sector.
Illustration 3.3 The different steps in an industry analysis before and after analysing the five
Define the industry clearly. (do the actors face the same S/B/Entr/Sub?)
Determine the underlying factors and total strength of each force. (not equally
Determine how to position your business in relation to the five forces. (exploit one of
the weak forces? Neutralise any strong force?
3.3 Industry types and dynamics
The five forces framework is the most well known tool for industry analysis, but it has to be
used carefully. First industry types and their underlying economic characteristics should be
considered because they will have major implications on the industry attractiveness and what
competitive strategies are available.
Second also stable industry structures change. Therefore
also the basic industry dynamics in competitive forces need to be considered. This section
thus examines first fundamental industry types and the industry change and dynamics.