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Instructors’ Manual to Accompany Contemporary Strategy Analysis (9th edn., Wiley, 2016)
CHAPTER 4. FURTHER TOPICS IN INDUSTRY AND COMPETITIVE
ANALYSIS
Introduction
Chapter 3 on industry analysis concentrates upon presenting and applying Porter’s Five Forces of
Typically, I do not devote a separate class to the topics included in Chapter 4—my approach is to address
the topics, concepts, and frameworks that the chapter addresses when they arise in different case
discussions. For example:
• The role of complements and the implications for network externalities and “platform-based
competition” are discussed in the cases on video games (“Video Game Console Industry in
2015”) and Google (“Google is Now Alphabet—But what’s the Corporate Strategy?”).
The learning objectives of Chapter 4 are for students to be able to:
• Recognize the limits of the Porter Five Forces Framework, and extend the framework to include
the role of complements as well as substitutes;
Class outline
The topics I cover is determined largely by the choice of case.
For example, in Ford and the World Automobile Industry in 2009 an important issue is the segmentation
of the industry. Given that the overall industry outlook for profitability is so poor, a critical issue is which
national markets and product segments offer opportunities for above average margins.
Highly concentrated industry offer the opportunity to address issues of competitive interaction between
firms: see for example, the cases on Coca-Cola/Pepsi-Cola, Boeing/Airbus, and NutraSweet/Holland
Sweetener.
cases are available.
The Cases
Cases Dealing with Competition involving Complements
Power Play [A]: Nintendo in 8-bit Video Games (Harvard Business School Case No 9-795-102).
Ultimately, strategy is not about understanding the industry environment and predicting changes in
Video Game Console Industry in 2015 (R. M. Grant, Contemporary Strategy Analysis: Text and Cases,
9th edn., Wiley, 2016. Also available from Wiley via www.contemporarystrategyanalysis.com). I use this
case primarily for the analysis of competitive advantage in technology-intensive industries (Chapter 9),
Cases Dealing with Dynamic Aspects of Competition
Looking beyond the Porter five forces analysis calls for a competitive analysis that is more dynamic and
A classic situation for exploring the competitive interactions between two industry-dominating players in
the fiercely competitive yet highly profitable market for cola drinks. It is an excellent case for the analysis
of industry structure and industry attractiveness, the impact of structural changes on competition, and
competitor analysis.
Boeing and Airbus: Competitive Strategy in the Very-Large-Aircraft Market (Kellogg School of
Management Case No. KEL022-PDF-ENG, 2006)
Competition between Boeing and Airbus in the market for very large commercial jets is a classic case of
Ryanair’s decision to expand it routes puts it into direct competition with British Airways and Aer
Lingus. How will these giants respond to tiny Ryanair’s entry into their lucrative Dublin–London route?
The case offers a good opportunity to undertake competitor analysis and predict competitive responses.
The case documents the outbreak of aggressive competition between the main US pet food producers in
the late 1980s. A key feature of the case is the extension of competitive rivalry across markets as
competitors take competitive action in one market to help preserve their positions in other markets.
Cases Dealing with Segmentation and Strategic Groups
Ford and the World Automobile Industry in 2015 (R. M. Grant, Contemporary Strategy Analysis: Text
and Cases, 9th edn., Wiley, 2016).
The primary focus of the case is industry evolution and the relationship between industry structure and
profitability in the global auto industry (see the Instructors’ Manual for Chapters 3 and 8). However, the
