Consider the external environment and relevant factors in the Macro-Environment

Question

Consider the external environment and relevant factors in the Macro-Environment in your company and respond to the following questions:

Explain “What Factors Are Driving Industry Change? It would be appropriate for you to answer these questions in light of the current situation with your company, and discuss this with your co-managers. Once you have discussed and debated this with your co-managers you must decide “How Are Industry Rivals Positioned In the Market?”; “What Strategic Moves are Rivals Likely to Make Next?” and “What Are the Industry’s Key Factors?

Explanation / Answer

The most important part of driving forces analysis is to determine whether the collective impact of the driving forces will be to increase or decrease market demand, make competition more or less intense, and lead to higher or lower industry profitability.The Most Common factors for drivers of Industry Change are as follow.

1.Changes in the long-term industry growth rate.

2.Increased globalization

3.New Internet capabilities and applications.

4.Changes in who buys the product and how they use it.

5.Technological change and manufacturing process innovation

6.Product and marketing innovation

7.Entry or exit of major firms

8.Diffusion of technical know-how across firms and countries

9.Changes in cost and efficiency

10. Reductions in uncertainty and business risk

11. Regulatory influences and government policy changes

12. Changing societal concerns, attitudes, and lifestyles

Understanding how our competitive rivals are positioned in the marketplace helps us to refine our own business strategy so that we can counter competitive threats and strengthen our own position. To build an understanding of our competitors’ positioning, analyze their marketing communications, monitor analysts’ views of the marketplace and research customers’ attitudes towards competitors.

Positioning Statements

Positioning statements focus on the factors that are important to customers and differentiate a company from its competitors. To understand your competitors’ positioning, review their advertisements, website content and other marketing communications to identify their positioning statements

Market Analysts

Market analysts and research firms produce independent reports on market sectors that can help to understand competitors’ positioning. Statistical reports provide an analysis of the market by factors such as market share or sales, giving an indication of performance relative to competitors in a market league table.

Customer Perception

The most important measure of a competitor’s positioning strength is customer perception. We need to understand how customers view our competitors’ strengths and weaknesses so that we can protect our customer base.

Strategy

Competitive intelligence provides an indication of how successfully our competitors are positioning themselves in the market. We must use this information to review our own strategy. If we position our company as an innovator, for example, competitive intelligence may indicate that competitors have a stronger reputation for innovation.

Strategic Priorities

Understanding our competitors’ positioning enables to set our own strategic priorities. Use competitive intelligence to anticipate and respond to the strongest threats to our customer base. Identify the most important factors that differentiate your company from competitors and prioritize strategic programs such as new product development or manufacturing investment that will strengthen our position.

What Strategic Moves are Rivals Likely to Make Next is best on :-

A firm’s own best strategic moves are affected by

Profiling key rivals involves studying

Scouting competitors well enough to anticipate their actions can help a company to prepare effective countermoves and allows us to take rivals' probable actions into account in designing our own company's best course of action.

An industry's key factors are the particular strategy elements, product attributes, competitive capabilities, and business outcomes that spell the difference between being a strong competitor and a weak competitor—and sometimes between profit and loss. An industry's key factors by their very nature are so important to competitive success that all firms in the industry must pay close attention to them .Correctly diagnosing an industry's Key factors raises a company's chances of crafting a sound strategy. The goal of company strategists should be to design a strategy aimed at stacking up well on all of the industry sucuss factor and trying to be distinctively better than rivals.Indeed, using the industry's key sucuss factor as cornerstones for the company's strategy and trying to gain sustainable competitive advantage by excelling at one particular KSF is a fruitful competitive strategy approach.

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