The Strategist's Choice: Competitor Analysis

In highly concentrated industries, the key characteristics of a company's external environment are determined by the behavior of a few competitors. In household detergents, Unilever's industry environment is dominated by the strategy of Procter and Gamble. The same is true in soft drinks (Coke and Pepsi), jet engines (GE, United Technologies, and Rolls-Royce). Similar circumstances exist in more fragmented markets. For the owner of a Shell filling station in a British village, the dominant feature of the local petrol station market is the competitive behavior of the Esso station across the road.