Competitive environment assessment

This section on assessment of the competitive environment is being developed, and will be expanded.

Market demand is not guaranteed.  Cyclical demand may be in a downward or upward phase.  Life cycle demand increases but eventually declines over time.

Market and industry dynamics change.  The forces driving industry competition - competitive rivalry, bargaining power of buyers and suppliers, and threat of new entry and substitute products - increase over time, driving down industry and company profits.

Market demand and competitive forces changes as a result of industry drivers of a political, economic, social, technological, legal and environmental nature.

Accordingly, a business may find itself serving unattractive markets, offering obsolete products, employing obsolete technology or dissipating its resources in diversified and non-core operations.

The business that does not keep pace with the changing environment typically face a loss of strategic directions in terms of where and what it wants to be and how it should compete. 

Typically, it starts suffering from lack of a competitive advantage and clear customer value proposition to fully exploit core competencies and best position a business vis-à-vis its competitive environment

What we do to assess the competitive environment

Our external assessment of the market and industry consists of obtaining strategic market intelligence, and interpreting the threats and opportunities the pose:

  • Industry drivers (PESTLE analysis) - political, economic, social, technological, legal and environment trends.
  • Competitive forces (Porter) - rivalry amongst competitors, buying power of buyers and suppliers, threat of new entry and substitution.
  • Industry structure - commercial chain from supplier to consumer, including competitor and customer analysis.
  • Market size and growth rate; market segmentation.
  • The threats and opportunities of SWOT.

 

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