Framework for Competing in Emerging Industries
Compete in emerging industries
This framework provides a structured approach to competing in emerging industries, including identifying the structural characteristics of the industry, assessing the competitive environment, and selecting strategic alternatives.
- Identify the structural characteristics of the emerging industry, including technological uncertainty, strategic uncertainty, and high initial costs.
- Assess the competitive environment, including the presence of newly formed companies and spin-off firms.
- Evaluate the potential for innovation and strategic change to alter the industry structure and create competitive advantage.
- Identify Structural Characteristics of the IndustryIdentify the structural characteristics of the emerging industry, including technological uncertainty, strategic uncertainty, and high initial costs.Pro tipConsider the role of innovation and strategic change in altering the industry structureWarningBe aware of the risks of overreacting to new products or technologies
- Assess the Competitive EnvironmentAssess the competitive environment, including the presence of newly formed companies and spin-off firms.Pro tipConsider the use of strategic group analysis to identify potential competitorsWarningBe cautious of assuming that a single approach will work for all companies in the industry
- Evaluate Potential for Innovation and Strategic ChangeEvaluate the potential for innovation and strategic change to alter the industry structure and create competitive advantage.Pro tipConsider the role of innovation and strategic change in creating new market opportunitiesWarningBe aware of the risks of overinvesting in innovation and strategic change
The personal computer industry is an example of an emerging industry with rapid growth and technological change. Companies in this industry must be able to adapt quickly to changing market conditions and technological advancements.
The solar heating industry is a fragmented industry with many small, privately held firms. Companies in this industry must navigate the challenges of technological uncertainty, strategic uncertainty, and high initial costs.
The framework was developed by Michael E. Porter, a renowned expert in competitive strategy, as part of his work on industry analysis and competitive strategy.