A critical evaluation and determination of industry suitability in a competitive business environment
Dr. William Phiri, Euphrasia Ng’andwe, Justine Chamangwa, Jessie C Sazambile, Fabian Chalwe
Kennedy Chimfwembe, Lizzie Chawalika Banda, Louis Mwansa, Jessy M. Namwanja, John Kaoma and Nitta Banda who are co-authors of this article argue that the determination of industry suitability requires a firm to understand the external environment and know who the key players are. The paper identifies three key factors in this process including, identifying a firm’s competitors, critically analysing its competitors, industry structure and forces of competition. Competition is one of the inevitable forces in today’s business world. Competition is an accepted feature of corporate life for profit driven organisations. Managers need to have competitive information to understand the industry and its competitors, identify areas where competitors are weak and evaluate the impact of strategic actions on competitors. While managers may want a broad approach to competitor identification, to avoid competitive blind spots, they must hone in on groups of identified competitors separately in competitor analysis. While competitor identification is essentially a categorization task that involves classifying firms on the basis of relevant similarities, competitor analysis is an evaluative task that goes beyond mare classifications to compare rivals on the basis of relevant dimensions. Competitors should be analysed along various dimensions such as their size, growth and profitability, reputation, objectives, culture, cost structure, strengths and weaknesses, business strategies, exit barriers, etc. This paper provides insights for managers to use when evaluating and determining industry suitability for competitive advantage in an industry.