Taking advantage of industry shifts

Managers are at times caught on the wrong foot by sweeping industry changes which, they believe, were unpredictable. Indeed, corporate strategies often seem to be prepared as if such changes never occurred. As a result, reacting becomes a more pressing preoccupation than actually taking advantage of the change. Xavier Gilbert and Paul Strebel define as industry shifts situations where industry members are challenged by a new price/benefit offer developed by an insider or by an outsider to the industry, which is superior to what has been available thus far, and that cannot be matched with their current competitive approach. They submit that a large proportion of such industry shifts follow recognisable patterns that provide opportunities for their exploitation. The authors' conclusions about industry shifts are based on observations drawn from a database of some one hundred competitive situations examined between 1980 and 1988. In each situation, the industry or industry sector was studied to identify the impact of industry trends on the prevailing generic strategies and their key success factors. Important lessons can be extracted from these data: first, what triggers industry shifts; second, how industry shifts can be identified and exploited. These lessons have important implications for managing industry change through pro-active strategies.