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    Question 1: What Are The Industry's Dominant Economic Characteristics?

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    ronpbv
    This document discusses evaluating a company's external environment by analyzing the dominant economic characteristics of its industry. It identifies seven key questions to answer, with the first being the industry's dominant economic characteristics. These include factors like market size/growth, geographic boundaries, demand/supply conditions, market segmentation, and pace of technological change. The document provides a table outlining analytical questions to define an industry's distinguishing economic features to get a broad overview of the industry's attractiveness.

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    Question 1: What Are The Industry's Dominant Economic Characteristics?

    Uploaded by

    ronpbv
    18 views1 page
    This document discusses evaluating a company's external environment by analyzing the dominant economic characteristics of its industry. It identifies seven key questions to answer, with the first being the industry's dominant economic characteristics. These include factors like market size/growth, geographic boundaries, demand/supply conditions, market segmentation, and pace of technological change. The document provides a table outlining analytical questions to define an industry's distinguishing economic features to get a broad overview of the industry's attractiveness.

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    Identifying an Industry’s Dominant Economic Features

    Original Title

    Exhibit 3-1

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    This document discusses evaluating a company's external environment by analyzing the dominant economic characteristics of its industry. It identifies seven key questions to answer, with the first being the industry's dominant economic characteristics. These include factors like market size/growth, geographic boundaries, demand/supply conditions, market segmentation, and pace of technological change. The document provides a table outlining analytical questions to define an industry's distinguishing economic features to get a broad overview of the industry's attractiveness.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    18 views1 page

    Question 1: What Are The Industry's Dominant Economic Characteristics?

    Uploaded by

    ronpbv
    This document discusses evaluating a company's external environment by analyzing the dominant economic characteristics of its industry. It identifies seven key questions to answer, with the first being the industry's dominant economic characteristics. These include factors like market size/growth, geographic boundaries, demand/supply conditions, market segmentation, and pace of technological change. The document provides a table outlining analytical questions to define an industry's distinguishing economic features to get a broad overview of the industry's attractiveness.

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    of 1

    Chapter 3 Evaluating a Companys External Environment 41

    Analysis-based answers to these questions are prerequisites for a strategy


    offering good fit with the external situation. The remainder of this chapter is
    devoted to describing the methods of obtaining solid answers to the seven
    questions above.

    Question 1: What Are the Industrys Dominant


    Economic Characteristics?
    Analyzing a companys industry and competitive environment begins with
    identifying the industrys dominant economic characteristics. While the gen-
    eral economic conditions of the macro-environment identified through PESTEL
    analysis may prove to be strategically relevant, it is the economic characteris-
    tics of the industry that will have a greater bearing on the industrys prospects
    for growth and attractive profits. An industrys dominant economic charac-
    teristics include such factors as market size and growth rate, the geographic
    boundaries of the market (which can extend from local to worldwide), market
    demand-supply conditions, market segmentation, and the pace of technologi-
    cal change. Table 3.2 summarizes analytical questions that define the indus-
    trys dominant economic features.
    Getting a handle on an industrys distinguishing economic features not
    only provides a broad overview of the attractiveness of the industry, but also

    TABLE 3.2
    What to Consider in Identifying an Industrys Dominant Economic Features

    Industry Characteristic Consideration


    Market size and growth rate How big is the industry and how fast is it
    growing?
    What does the industrys position in the life cycle
    (early development, rapid growth and takeoff,
    early maturity and slowing growth, saturation and
    stagnation, decline) reveal about the industrys
    growth prospects?
    Scope of competitive rivalry Is the geographic area over which most compa-
    nies compete local, regional, national, multina-
    tional, or global?
    Demand-supply conditions Is a surplus of capacity pushing prices and profit
    margins down?
    Is the industry overcrowded with too many
    competitors?
    Market segmentation Is the industry characterized by various product
    characteristics or customer wants, needs, or
    preferences that divide the market into distinct
    segments?
    Pace of technological change What role does advancing technology play in this
    industry?
    Do most industry members have or need strong
    technological capabilities? Why?

    gam12893_ch03_037-067.indd 41 11/14/13 11:19 AM

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