Industry mapping is a powerful tool, and gives you a strategic view of the competitive terrain. This can be used as the foundation of an ongoing intelligence program. Building on Dr. Michael Porter's pioneering work, TKA has developed a set of tools we call Enhanced Industry Mapping. These take account of both "intra-industry" forces of Porter's model, but also add "extra-industry" forces—strategic externalities that can affect all industry players. In our experience, these are not as intuitive to understand—and can often be more important factors in enterprise competitiveness than forces inside the industry.
In industry mapping an attempt is made to plot the whole chain from first supplier through to final consumer, examining the relationships of each link in the chain. The industry mapping approach starts by drawing an outline diagram showing all the links in the chain. Figures give some examples of outline maps for a number of industries. It should be stressed that at this stage the need is to look at the industry and not just the firm.
This may not seem a profound statement, but I have seen many businesses which can draw such a map for what they themselves do, but have no knowledge of channels which they do not use. The next step is to relate the draft diagram to company market research and any external published information. When drawing the boxes, keep in mind the next part of the analysis, when all the key information about the industry will be recorded on the diagram. In the next stage of analysis the key information that enables the industry to be interpreted is recorded on the block diagram.
Figure is a very rudimentary outline of what must have been (c. 1969), and probably still is, one of the most convoluted industry structures imaginable. On the map we have started to record information about the number of firms in each box. How we complete the rest of the map would depend on our business interest.
Figure shows a more complex map. Again it is simplified and represents the metal container industry in the USA as it was in 1962. Before looking at the data, note that the map ends at the buying industries. In a real situation we might have a need to examine the customers of these industries – in most cases the consumer, but sometimes another manufacturer.
On the map in Figure you will notice that, although there are obvious gaps in information that could have been plotted, we have a very clear summary picture emerging from the forces which will affect competitive behaviour among can manufacturers. There are two dominant competitors in an industry squeezed by suppliers and customers and subject to both backwards and forwards integration. Figure comes from an article by Crashaw which describes a case history of an industry mapping exercise. In all these examples, information has been recorded in note form. A practical point is that a dossier of information in a more detailed format should be built up by those preparing the map.
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Strategic Management Tutorial
From Planning To Strategic Management And Beyond
Strategic Management: Success Or Failure?
A Look At The Total Process
The Challenge Of The Future
The Environment: Assumptions In Planning
Techniques For Assessing The Environment
Business Philosophy (ethics And Morality) And Strategic Management
The Corporate Appraisal – Assessing Strengths And Weaknesses
Analysing The Industry And Competitors
Analysing The Uk Management Development And Training Industry: A Case History
The Search For Shareholder Value
Vision And Objectives
Strategic Portfolio Analysis
Portfolio Analysis In Practice
Strategic Planning – A Second Look At The Basic Options
Multinational And Global Strategy
Technology And Manufacturing
Strategic Planning For Human Resources
Relating To The External Environment
Evaluating A Business Plan
Project Planning And Appraisal
From Plans To Actions
Management Of Change
Introducing Strategic Management
Why Planning Sometimes Fails
Strategic Management To Strategic Change?
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