Critical Essay
Industry Definition and Competitor Analysis in Strategic Management

Question: ‘A “strategic group” continues to be commonly defined as a group of firms within the same industry making similar decisions in key areas’ (Reger and Huff, 1993). Analyse the process of industry definition and competitor analysis as elements of strategic management.

There have been numerous viewpoints on the subject of strategy and its role in business since the advent of the industrial revolution and the development of modern management practice. Many modern day theorists and students of the subject, me included, are of the viewpoint that Strategy in business is an ever evolving subject. Strategy can be interpreted and utilised in a number of ways and no theory or viewpoint should be disregarded as each question asked and each framework devised can be beneficial when applied to any situation which merits strategic evaluation.
Industry definition is an integral part of the strategic process as a business needs to establish where it will be active, i.e. which market it will be involved in, how to access this market and then how to control the market. This could be equated to The ‘P’ in the well known PESTAL Analysis framework, where the business establishes its position in the marketplace.
In Hambrick and Fredrickson’s framework ‘The Five Major Elements of Strategy’ the authors list Arenas, Vehicles, Differentiators, Staging and Economic Logic as the five most important areas to consider when formulating a strategy for a business. Industry definition can be applied primarily to arenas as the business needs to establish in which market it will be active. This process is of extreme importance as ‘in articulating arenas, it is important to as specific as possible about the product categories, market segments, geographic areas, and core technologies as well as the value