Review classmates’ posts and discuss whether the cost leadership or differentiation competitive strategy would be the most effective approach based on the three items provided.            

Jereca McReynolds

The three questions that I chose are:

How fast is the industry growing?

Is it stagnant or declining?

How many competitors are there?

I know that these questions are all together but I think these questions are very important to the industry analysis because it helps to familiarize a person with the industry it is getting into. Usually an industry analysis is conducted when completing a business plan as well. Knowing how fast the industry is growing directly connects to the question of if the industry is stagnant or declining. A person looking to start a business would want to know this in order to see if it is worth deciding to pursue a certain industry. Knowing the competitors are important as well. If an industry is too saturated, the decision to not pursue may be considered as well. On the opposite end of this spectrum the answers to these questions help highlight opportunities in a specific industry. According to Young et al. (2018) “The Porter 5?forces model provides a systematic approach to studying the economic structure of an industry by analyzing the five basic competitive forces that affect industry returns. Any of these forces, if strong enough, can reduce or even eliminate industry profits.”.