6. Understanding the Industry Environment and Its Implications to Strategy

Immediately and instinctively starting to design a new strategy or identifying changes in an existing one, almost never leads to a successful and elegant solution. It is important to start the strategy design process by understanding the environment in which the firm aims at competing from different perspectives. There exist four key perspectives to consider, that is, the customers and their jobs-to-be-done perspective, the industry as a whole and its participants perspective, the firm and its own capabilities perspective, and the surrounding environmental constraints perspective imposed by political, economic, societal, technological, legal, and environmental circumstances. In addition, industry trends influencing the firm and its customers need to be identified and validated to gain a holistic understanding of the industry environment and its implications to strategy design.