Strategic positioning within the industry

Economic Foundations of Competition

・Company economic performance results from two distinct causes

Industry structure ⇔ Strategic positioning within the industry

Strategic thinking must encompass both areas
Companies must focus on the health of the industry.
Not just their own position.

Determinants of Industry Profitability
Industry Structure

Threat of Substitute Products or Services.

Bargaining Power of Suppliers
Rivalry Among Existing Competitors
Bargaining Power of Buyers
Threat of new Entrants

Part of the strategy is to drive appositive transformation in industry structure

For example, Industry is like airlines. Not attractive.
On the other hand, business software industry is very attractive.
Software is very profitable.
No accident, no crash, no fuel cost.
So, which industry you want to play?

Second part., its Positioning
How can you be in above the average?
How to you are superior?

Achieving Superior Performance within an industry

Differentiation (Higher Price)

Competitive Advantage

Lower cost

Be more profitable than competitors.
Which will you chose?

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