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The basis of the competitive analysis strategy is to understand and to beat competition. However, consultants often define the competition in a too narrow sense as if it takes place only among direct competitors present on the market today.
Competition for profits extends far beyond companies competing in any industry. It also comprises four other competitive forces: customers, suppliers, prospective new companies and product substitutes. A complex competitive environment of a business derived from analysis of all five competitive forces determines the industry structure and reflects the nature of competitor relations within the industry.
What we do
In the course of the competitive analysis, along with the five competitive forces mentioned above, there is the sixth one – the relative influence of other stakeholders (involved parties). These parties can affect industry marginality and business strategy by means of political, legal and social influence. The involved parties can include governments, regulatory and fiscal authorities, ecological or public groups and organizations, trade unions.
Factors that will be analysed:
POLITICAL – stability of a government’s policy, tax regimes, regulation of the international economic trade, social security norms.
ECONOMICAL – industrial and economical cycles, a GDP trend, interest rates, money supply, inflation, unemployment, after tax return.
SOCIAL AND CULTURAL – population demography, income distribution, social mobility, lifestyle changes, attitude to work and rest, customer characteristics, educational level.
TECHNOLOGICAL – a state’s research investments, state and industry focus on technologies and innovations, new discoveries and developments, technological transfer speed, wear level.
ECOLOGICAL – laws and regulations on ecology protection, waste recycling.
LEGAL – laws on monopolies, employment, healthcare and safety measures.