From the course: Developing a Competitive Strategy
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Understanding industry dynamics
From the course: Developing a Competitive Strategy
Understanding industry dynamics
- No company operates in a vacuum, thus, turning a blind eye to industry dynamics can be downright foolish. Leaders at Eastman Kodak learned this lesson bitterly when they underestimated the speed with which digital imaging would wipe out traditional cameras and chemical films. Changes in the external environment almost always have an asymmetric impact on the fortunes of industries and companies. Some benefit while others lose. Take aging of the population. This trend is a negative for the baby diaper business but a plus for the sellers of products and services for older people. How should you analyze the emerging dynamics of your industry in a systematic manner? I advocate a two-layered approach. The first layer refers to the industry ecosystem immediately surrounding your company. There are four parts to this ecosystem: suppliers, customers, complementors, and competitors. The supplier ecosystem refers to not just your immediate suppliers but also their suppliers and their…
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