Industry Competitive Analysis

EXECUTIVE SUMMARY

An industry without healthy competition is innate and is doomed to failure, and to remain competitive, its players need to be in continuous rivalry, and be aware of the market dynamics and make use of industry analysis as well as competitor intelligence tools and techniques to take strategic decisions that will properly position them and enable them to survive fierce competition.

INTRODUCTION

The first part of this paper will define what is meant by industry, why analysis is needed, what we mean by competitiveness and why it is important, and the different industry analysis tools that help decide whether any industry is competitive or not. The second part of the paper will give advice to a new entrant firm entering a competitive industry. The final part will make use of the findings of the analysis to decide whether or not this industry is a good investment. As any other research paper, this one is bound to limitations that will be covered at the end.

INDUSTRY

As defined in Investopedia (2010), industry is a classification that refers to a group of companies that are related in terms of their primary business activities such as the automotive, manufacturing, retail, etc.. Some of these industries are divided into sub-industries such as the retail industry that has many sub-sectors such as music stores/supermarket etc... This paper will focus on the Food & Beverage retail industry (retail stores).

Industry analysis is an important component of effective strategic planning. It consists of three major elements: the underlying forces at work in the industry; the overall attractiveness of the industry; and the critical factors that determine a company's success within the industry. (Advameg Inc., 2009).

Despite the importance of this analysis, it is significant only in a relative sense; the key is in finding the differing abilities between a certain firm and the competition in dealing with the industry forces that impact it. If abilities...