Typical Steps in Industry Analysis

Porter uses the phrase operational effectiveness (OE) to refer to a company’s ability to perform similar activities better than rivals. Most managers use the term “best practice” or “execution.” Whichever term you prefer, we are talking about a multitude of practices that allow a company to get more out of the resources it uses. The important

can’t have it both ways because the choices are incompatible.

An intriguing recent study has found a so-called IKEA effect: that self-assembly actually raises, not lowers, the price consumers would be willing to pay. Not bad when you can raise customer value and lower your own costs at the same time!

First, as different from one another as industries might appear on the surface, the same forces are at work under the skin.

They are large and concentrated relative to a fragmented industry (think Goliath versus many Davids).

they need to run their business. Dell’s strategy resulted in negative working capital, which further enhanced Dell’s cost advantage. Sustainable cost advantages normally involve many parts of the company, not just one function or technology. Successful cost leaders multiply their cost advantages. They are not just “low-cost producers”—a commonly

Progressive’s target customer posed a special challenge. How do you turn a bad driver into a profitable customer? Progressive needed a different value chain from the industry’s standard one. First, Progressive tackled risk assessment in a different way, building a massive database with more granular indicators that better predicted the probability

Enterprise crafted a unique value proposition to meet these needs: reasonably priced, convenient, home-city rentals. Compared with Hertz and Avis, Enterprise has chosen to serve a different need at a different relative price.