Summary of The Five Competitive Forces That Shape Strategy

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The five competitive forces that shape strategy are industry structure, rivalry, technology, environment, and consumer behavior. These forces have a major impact on business strategy, and understanding them is essential to success in the marketplace.

• 00:00:00 The competitive forces that shape strategy are the five forces of rivalry, substitute products and services, threat of new entrants, bargaining power of buyers and suppliers, and the threat of labor unions. These forces determine an industry's profitability and competitiveness. Airlines, soft drinks, and airlines' suppliers (engineers, gates, etc.) are examples of industries with strong competitive forces that impede profitability.
• 00:05:00 The five competitive forces that shape strategy are industry structure, rivalry, technology, environment, and consumer behavior. The framework can be applied to any industry, and understanding these forces is essential to strategic planning. One way to deal with rivalry is to expand the profit pool, and focusing on dynamics such as technology and consumer behavior can help companies stay ahead of the competition.
• 00:10:00 The five competitive forces that shape strategy have been around for 30 years, and they will continue to shape business strategy for decades to come. managers and employees understand these forces intuitively, and it is important for companies to have strategy documents that are broadly understood throughout the organization. Competition is not always zero-sum, and it is important for businesses to pursue unique strategies that can be successful in the marketplace.