Nowadays :: Business and Management Studies

NowadaysNowadays, analysing contest is critical for managers in order to visualise the environment in which the backing evolves, itscompetitors (their goals, plans etc) as comfortably as see strategiesand position their companies. They can use a wide variety oftechniques, apiece having its strengths and weaknesses. According toPrescott and Grant (1988), to select the appropriate techniques,managers shake off to know the unalike techniques available, how they arerelated to each other, the commission and scope of the area and theconstraints close the extent of analysis. To analyse competitionefficiently, they have to combine some of the varied techniquesavailable as they all have a specific aim. However, there arelimitations that managers have to take into consideration in order to let a clear and effective work.This essay outlines and evaluates the main weaknesses whenunderstanding the business environment. They vary by nature. They cancome from the interpretation of the m anagers and from the modelsthemselves. However, they are in relation to each other, one flawleading to another one.When analysing competition, the starting line point is to precisely definethe attention the firm be unyieldings to and its boundaries. Managers mayfocus on the market of their company, narrowing their definition ofthe industry. They then forget or less consider other segments thatcan change quickly and have impact on the whole industry. According toZahra and Chaples( 1993) an effective definition of industryboundaries requires consideration of four interrelated issues domain(where does the industry begin and end), customer group (sector to beserved and their specific needs), customer functions (customer needand specific patterns) and fine technology (production, marketingand administrative system). Each point enables to define thecompetition more and more precisely. In addition to these issues,managers have to take season into consideration. Reviewing theirbusiness definition, the shape of the industry and the market overthe time is crucial as industries change. Prahalad (1995) states thatmany industries are undergoing massive transformation. Deregulation, world-wide excess capacity, global competition, mergers and acquisitions,changing customer expectations, technological discontinuities arechanging industries, creating new industries and inception up new andlarge growth markets for existing businesses. For instance, chemicalcompanies bow the pharmaceutical industry by making alliances withyoung biotechnology companies, not considered as a threat by thepharmaceutical companies. This change in the industry led thepharmaceutical companies to redefine the industry and its boundariesas well as their strategy.Managers need to be vigilant in identifying its competitors. A miserableidentification leads to a wrong positioning and a possible long timeresponse to the different actions coming from those undetected rivals.This identification is sym biotic on the managers perceptions and how