Analysis of competitors' competition and driving forces in the industry. Analysis of the driving forces in the industry

Driving forces can be:

Introduction of new products;

enterprise strategy.

Strategic management.

1. SWOT - analysis: purpose, content and use of the analysis. SPACE method:SWOT analysis method designed for strategic analysis large and medium enterprises. 8PACE method designed for strategic analysis of medium and small enterprises. SWOT analysis is considered to be one of the fundamental methods of strategic management. It is a tool for a quick comprehensive assessment of the strategic position of an enterprise in a changing external environment and provides an assessment of its strengths and weaknesses, as well as additional external opportunities and threats. Strengths enterprises reflect its successes (achievements) and special opportunities that can serve as the basis for the formation of a strategy and its competitive advantage. Strengths can be: skills, significant experience, valuable organizational capabilities and/or competitive advantages, etc. Weak sides reflect the absence of something important for the activities of the enterprise, putting it in unfavorable

The use of SWOT analysis allows you to assess the strategic balance of the company's capabilities. At the same time, strengths should be used as the basis for formulating the strategy and competitive advantage of the enterprise. If the strengths are not enough to obtain the necessary competitive advantages and achieve the desired result, the enterprise strategy should be focused on the creation of a base for the formation of a successful strategy (that is, the formation of the necessary competitive advantages). An example of the main characteristics used in assessing the strengths and weaknesses of an enterprise, its opportunities and threats, taking into account environmental factors in table 1.

Table 1- The main characteristics used in assessing the strengths and weaknesses of the enterprise, its opportunities and threats.

8PACE method provides for the definition and analysis of the strategic position of the enterprise on the basis of two groups of factors: his internal state and external position (state of the environment). Each group consists of a certain set of variables, so the method is multicriteria. Because of this, it allows the identification and selection of the necessary ( representative or representative) a statistically reliable set of characteristics, their ordering into groups and assigning them specific estimates (weights within the accepted measurement scale). When applying the SPACE method, four groups of criteria for assessing an enterprise are distinguished:

1) financial capabilities (strengths) of the enterprise;

2) the competitiveness of the enterprise and its position in the market;

3) the attractiveness of the industry (sector) where the enterprise operates;

4) industry stability.

An example of the main criteria included in each group when implementing the method is shown in Table 2

Table 2 - An example of the main criteria for assessing an enterprise

The implementation of the method requires additional work, step by step accompanying the procedures for selecting initial data and corresponding calculations.

Analysis driving forces in branch. Identification of driving forces, goals and stages of analysis.

The analysis of driving forces is carried out in two stages: identifying the driving forces themselves and determining the degree of their influence on the industry.

Driving forces can be:

Changes in the economic growth trends of the industry;

Changes in the composition of consumers and ways of using the product;

Introduction of new products;

Technological changes in production;

Changes in the marketing system;

Changes in the composition of producers on the market;

Distribution of know-how (dissemination of advanced production methods, transfer of technologies across national borders, purchase and sale of companies that own the necessary technology, etc.);

Globalization of the industry by increasing the competitive advantages of the leading companies in the industry;

Reducing the influence of uncertainty and risk factors.

The purpose of the driving force analysis is to identify the main

reasons leading to changes in the industry and the level of competition

in it, to which it is necessary to focus the developed

enterprise strategy.

Driving forces, as a rule, are (i.e. can be qualified as driving forces) three or four main factors out of a large number of them, which influence and determine the development of the particular industry under consideration. Therefore, an assessment of the influence of such factors and the consequences of this influence is mandatory for the adaptation of an enterprise to changes in the industry and competition in it.

One of effective ways determining and predicting the impact of driving forces on changes in the industry is monitoring the external environment. Other well-known methods are also used (studying events, creating scripts, the Delphi method, etc.).

The assessment and forecast process includes three successive stages:

1. Determining the strategy of competitors.

2. Identification of promising (strategic) industry leaders.

3. Forecast of strategic actions of competitors.

A general idea of ​​​​competitors is formed on the basis of an analysis of data on their position in the industry, actions in the past and present, on their approaches and actions in the competitive struggle.

The considered economic indicators and the structure of the industry describe its current state, without explaining the changes taking place in it.

Concept driving forces industry comes from the fact that there are environmental factors whose actions determine the direction and intensity of industry changes.

The analysis of the driving forces of the industry is carried out in two stages:

Identification of driving forces;

Study of their impact on changes in the industry.

M. Porter identified eleven types of driving forces that have the ability to change market conditions and intensity of competition in the industry:

· Changes in the long-term growth rate of the industry. A strong rise in long-term demand attracts new firms, the expectation of a recession encourages firms to leave the market.

· Changes in the composition of buyers and ways of using the product. These factors are the reasons for changing consumer requirements for services (credits, repairs, maintenance), creating other distribution channels, changing marketing tactics, expanding or narrowing the range of products.

· Product update. Helps expand the market and stimulate demand. Increases the degree of differentiation among competing sellers. Influences production methods, effective output scales, distribution channels, etc.

· Technological changes. They can greatly change the relative costs of production, the amount of investment, the minimum effective size of production. They tend to be vertically integrated. All this can lead to a change in the number of companies operating in the market.

· Marketing innovations. Set in motion new forces that change the conditions of competition and the positions of rival firms.

· Entry or exit of large firms. It means a redistribution of roles and the selection of new key players.

· Diffusion of technical know- how. Becomes important driving force in competition.

· Changes in Costs and Efficiency. Change the strategic behavior of companies in the industry.

· The emergence of consumer preferences differentiated product instead of a consumer product (or vice versa). It can limit the freedom to choose any other strategies, except for price ones.

· Changes in public policy and regulation. Can greatly change the market and competitive conditions.

· Changing Uncertainty and Risk. New industries are characterized by great uncertainty and a fairly high risk of failure. As an industry ages, uncertainty and risk decrease.

Driving forces must be constantly monitored and analyzed.

Alternatively, you can use the method development of alternative scenarios. It involves a description of a sequence of events leading with a certain probability to a predicted end state; or, conversely, it takes into account the possible consequences of the choice made.

Another approach to identifying the drivers of an industry and their impact on it is to use the Delphi method. Its essence: selected experts fill out written questionnaires, then these materials are circulated within the group until a universal agreement is reached.

The driving forces of the industry, as well as other factors in the external environment of the organization, can be assessed according to three criteria: importance for the industry, impact on the organization, direction of influence. The importance of this type of driving force is then determined (see Section 7.1).

Strategies according to the McKinsey matrix

Topic: Industry Analysis

1. Dominant characteristics of the industry

2. Determination of the driving forces of the industry

3. Key success factors (KSF)

Dominant characteristics of the industry

Purpose of analysis- determine the attractiveness of the industry.

Dominant characteristics of the industrial environment:

1) market size - important for evaluating investments and determining the market share of competitors.

2) industry growth The life cycle of an industry is similar to the life cycle of a product. The greatest attention is paid to the forecast of turning points, when the pace and direction can change.

3)industry cost structure - an important task of industry analysis is to identify - is there an experience curve in the industry? It is assumed that if an enterprise accumulates production experience, then its real costs without taking into account information will decrease at a predictable rate, namely, with an increase in output by 2 times, the costs per unit will decrease by 20-30%.

Saturation of markets and product differentiation reduces the value of the experience curve. In addition, cost reduction does not always provide a competitive advantage for the enterprise.

4) marketing system – the analysis determines the distribution channels prevailing in the industry, the existence of alternative channels and who owns them, access and control over the distribution channel (CFC).

5) market structure analysis – based on the concept of an enterprise’s market share – the ratio of sales volume this enterprise to the total sales of this product on the market for a certain period. It is important to determine the cost of concentration of production in the industry.

The following indicators are used:

4-part concentration indicator;

Herfindahl index;

Rosenbluth index.

6) the number of enterprises in the industry and its structure.

7) product characteristic.

8) the number of buyers.

9) the size of the entry barriers.

10) the number of employees and the level of salaries, etc.

Determining the drivers of the industry

The market and competitive conditions change under the action of forces in constant motion that create incentives or pressures for change - these are driving forces (DS).

Michael Porter highlighted 11 types of DS:

1) fast or slow growth of competition;

2) changes in the needs and ways of consuming the product;

3) product update;

4) marketing of innovations;

5) innovation in general;

Driving force analysis

We will determine the factors that have the greatest impact on changes in the industry (driving forces) based on the Porter structure, where we will justify the degree of their influence, after which we will evaluate their impact on the industry according to three criteria: importance for the industry, the degree of influence on the organization, and the direction of influence.

1) Change in the long-term growth rate of the industry. In the industry as a whole, there is an increase in demand for all types of pumps, due to the sharp obsolescence of this equipment and its depreciation at enterprises. According to preliminary data, the depreciation of production assets for this group of equipment is 70-80%. Therefore, many manufacturers, in order to prevent emergency situations due to an increase in failures in the operation of pumps that have exhausted their service life, on the one hand, and in order to save electricity, on the other hand, are increasingly inclined to purchase new equipment and, as a rule, more reliable imported equipment. The driving factor will have a strong impact on changes in the industry in the long run.

2) Changes in the composition of buyers and ways of using the product. Since then, there have been some changes in these characteristics, especially for those groups of buyers who are in profitable growing industries, where the opportunities for modernization and expansion of production are associated with a large influx of investments (Appendix 1). In addition, vacuum technology itself is now gaining momentum, replacing compressed air and hydraulic technologies. Due to the ongoing shift in the industry differentiation of buyers, due to the change in the flow of investment and the spread of technology, a very noticeable driving factor in terms of the strength of the impact.

3) Product update. This driving factor can be taken into account mainly in relation to imported pumps, the number of offers for which is increasing every day. The renewal of product groups in this case is usually associated either with the entry of new players into the market, trying to occupy their niche in the industry with the help of new specialized pumps, or with the desire of competitors to expand the range and thus maintain falling interest in themselves. As a result, this driving force is due to the intention of many firms, through the implementation of a differentiation strategy, to achieve strong competitive advantages. This is mainly true for the more specialized vacuum pump market, where the growth in new product designs is particularly noticeable. This growth of novelties has an impact on the changing preferences of customers. And this depends on the ability of sales organizations to communicate these changes to customers and at the same time focus on significant differences in their products. These may be some qualitative, operational differences that actually play a greater role in customer decisions than price ones (clause 1.2 of Appendix 1). In general, we can talk about an average or lesser impact on the dynamics of the industry, since the change in preferences is rather slow.

4) Technological changes. If we talk about domestic products, then some changes are made with great difficulty due to the technological lag behind developed countries. As for imported equipment, there are not so many of these changes already due to years of proven technology, and there are not so many obvious breakthroughs in this area. Weak factor in terms of the strength of influence on the dynamics of the industry.

5) Marketing innovations. It should be noted that this driving force is very significant, both due to objective reasons related to the development of market relations in our country, and due to the fact that without taking into account this factor, the enterprise simply cannot compete with dignity.

6) Entry and exit of large firms. The entry of such organizations into the market can create a situation where a newly arrived firm This assumption applies to trade organizations will begin to engage in already "hyped" famous brands and, thus, will take a significant share of the segment from small suppliers supplying this equipment. As a result, this circumstance can significantly change the ratio of competitors' positions. The same goes for exiting organizations, as it allows other followers, as well as firms that know their place in the market, to dramatically expand their activities and begin to control a larger market share. The appearance of new assembly plants of foreign manufacturers can also noticeably change the situation on the pump market. This factor can greatly change the balance of power in the industry.

7) Diffusion of technical "KNOW-HOW". As mentioned above, all innovations in recent times come from the West, which causes their partial borrowing from Russian manufacturers, but due to technological backwardness, not all of them can be put into practice. Therefore, the effect of this factor is too long in time, but at the same time it serves as an additional incentive to improve the efficiency of domestic enterprises.

8) Changes in costs and efficiency. The toughening of competition forces the domestic manufacturer, in order to reduce the cost or maintain it at the same level, to minimize all possible costs through the purchase of cheaper materials, the development of more productive technology, and the reduction of transaction costs. Intermediaries are also interested in reducing the latter type of costs and optimizing the entire supply chain to increase their profitability. This leads to the fact that many who did not have time to come to a new understanding of the problems of efficiency leave the industry. In recent years, this driving force has become more tangible, especially after the introduction of many high-quality substitute products on the pump market and the increase in the number of competitors.

9) The emergence of consumer preferences for differentiated products. Characteristics of consumer preferences can be addressed, as was done above, to two submarkets: water and vacuum pumps, the most differentiated of which is the second. This submarket is characterized by large differences inherent in pumps from different manufacturers. There are categories of customer groups whose consumer preferences have already developed and are a kind of determinant, which is practically impossible to influence. For example, this is typical for furniture industry enterprises, where preferences for suppliers of vacuum equipment are strictly associated with the German company BUSCH, whose product prices are quite high. However, this criterion is not decisive for the buyer, unlike a well-established brand, the image of which among customers is associated with very high quality and reliability. And the offer of new cheaper substitutes does not affect the change in customer preferences. In other customer segments (the glass and plastics market), where there are large volumes of investment, construction, customers are more willing to introduce new pump designs, and the price criterion already plays a role. At the same time, the offer of a wide model range and additional services, which is exactly what the company we are considering specializes in, allows to some extent to influence the change in customer preferences. The impact of this factor is slightly below average.

We will evaluate the impact according to three criteria based on the above justification (Table 3).

Table 3

Assessing the drivers of the industry

As can be seen from the table, factors 1, 2, 5, 6, 8 have the greatest influence on the dynamics of the industry, so they must be taken into account when developing possible strategic alternatives. Factors 3 and 6 should be feared, since not taking them into account in the development concept of our enterprise can lead to disastrous consequences, up to curtailing activities in this area. A possible way out of this situation can be the diversification of activities in the long term. In the future, however, the firm should not take a too narrow approach to the definition of business, as this may create problems in the sale of goods, despite the fact that the need will increase. This means that we may miss emerging development opportunities that competitors will not fail to take advantage of. This circumstance is connected with the generic needs of customers, the essence of which is that business should be approached from the standpoint of the generic needs of the buyer, and not from the standpoint of the product.

An industry is a group of companies whose products have similar consumer properties and are intended for the same consumers. As part of the industry analysis, all factors that influence the degree of competitive behavior are identified. There are two areas of industry analysis:

1) determination of the economic characteristics that dominate in the industry;

2) identification of driving forces in the industry.

Let's consider the selected areas of industry analysis.

1. The dominant economic characteristics of the industry are determined by analysis of a number of parameters (Table 5.1), which depend on the stage of the life cycle of the industry, and, ultimately, come down to identifying the degree of competition in the industry.

1. Growth rate of the industry. Competitive behavior will be less aggressive at relatively high industry growth rates, since each company can then increase sales without increasing its market share.

2. Doprofitability level. Lack of profit across an industry or among major market players tends to make competitive behavior less predictable.

3. Fixed cost level. Investments lead to an increase in the share of fixed costs, which, with increased competition on price, can lead to a decrease.

4. Savings depending on the scale and experience of the company. The behavior of competitors will be more aggressive if there are obvious advantages from the large scale of the firm.

5. Level of differentiation. The imperfection of markets creates a certain level of protection for individual firms: it makes sense to expect fierce competition when companies offer a standardized product, and more loyal behavior of competitors when the product is highly differentiated.

Table 5.1

Economic characteristics of the industry

6. Number of firms and market niches. A niche industry in which no firm has significant market share tends to be more competitive than an industry with a market leader. Industries are conventionally divided into two types:

Consolidated industries - there are several major players, while a change in strategy or the departure of one of the players from the market changes the situation and redistributes forces in the industry.

Fragmented industries - characterized by the absence of a leader, a large number of relatively small companies operate on the market. The industry is characterized by low barriers to entry, lack of economies of scale, and a high degree of differentiation.

As an industry develops and moves from one stage to another, the type of industry may change.

7. The emergence of a newcomer to the industry. Often in established industries, agreements are formed between counterparties that mitigate the aggressiveness of competition. This situation is often changed by the beginner who either does not know the hidden rules or simply chooses to ignore them.

8. The nature of the product itself. Products that require immediate consumption are more susceptible to price reductions than those that can be stored cheaply for a long time.

9. Entry barriers these are factors that prevent a company from entering the industry, for example: high capital investments, high degree of product differentiation, volumes and level of production and sales, consumer loyalty to existing brands, industry maturity, fierce competition within the industry, patents, contracts with suppliers, integration, etc.

10. Exit Barriers - these are the barriers that prevent a company from leaving the market. As such, they consider economic dependence (on suppliers, consumers, employees and other groups) and psychological dependence (dependence on the field of activity and the industry itself).

2. Identification of the main drivers of the industry. The driving forces are represented by a number of factors, changes in which lead to significant changes in the industry itself. There are quite a few factors that can be considered driving forces, some of them are specific and characteristic only for individual situations or industries.

1. Change in long-term growth rate. This factor affects the ratio of supply and demand, the conditions for entering and exiting the market, the nature and intensity of competition. Steady growth in demand attracts new companies and intensifies competition. In a shrinking market, competitive pressure increases, intensifying the struggle for market share and causing acquisitions and mergers, resulting in industry consolidation with fewer participants.

2. Changesas part of consumers, the emergence of new ways of using goods. The allocated forces change the nature of competition, as the assortment of goods changes, old ones change and new distribution systems appear; new methods of promotion are emerging.

3. Product innovation. The introduction of new products expands the customer base, gives a new impetus to the development of the industry and leads to product differentiation of competing companies.

4. Technological changes. Technological innovations are revolutionizing the industry, creating opportunities to produce new and better products at lower cost, and opening up new perspectives for the industry as a whole.

5. Marketing innovations. Marketing techniques increase interest in products, increase industry-wide demand, enhance company differentiation, and reduce product costs.

6. Entry or exit to the market of large companies. The appearance of a new powerful competitor on the market always changes the conditions of competition: not only the balance of power among the players changes, but also the nature of competition. The same thing happens when a large company leaves the industry: the structure of competition in the industry changes, the number of leaders decreases (while the positions of the remaining players improve), and the competition of the remaining companies intensifies.

7. Globalization in the industry becomes a driving force in those industries where:

To achieve economies of scale, companies need to expand the market for their products outside the country;

Low price is the leading factor in capturing the market;

Large companies in search of new markets are trying to gain a foothold in as many countries as possible;

The main natural resources or materials come from different countries.

8. Change in costs and profits. Widening or narrowing the gap between costs and profits for major competitors can radically change the nature of competition in an industry.

9. The transition of consumers from standardized goods to differentiated. The development of the industry is largely determined by the increase or decrease in consumer interest in personalized goods. By noticing a shift in consumer preferences towards personalized products, suppliers can expand their customer base through customization, new models, original design, additional functions. On the other hand, consumers sometimes find that a standard product at a lower price satisfies their needs just as well as more expensive products with more features and personalized service. The shift in consumer preferences towards standard products intensifies price competition.

10. Impact of legislative changes.

11. Changing social values ​​and lifestyles. The emergence of new social problems, changes in public opinion and lifestyles are a powerful source of change in the industry.

12. Reducing uncertainty and risk in business. A growing industry is usually characterized by a lack of detailed information about the parameters of the market, therefore attracting risk-averse players. If the pioneering companies are successful, more cautious players (late adopters) also flock to the industry, usually among large, financially stable companies looking for profitable opportunities to invest in growing industries.

Thus, the industry is influenced by many factors, but only a few of them can be qualified as driving forces in the sense that they determine the features of the development of the industry.