Strategic Management Essay Example | Topics and Well Written Essays - 1500 words - 15

Strategic Management - Essay Example As can be seen in industries which become an icon for nations, there are strong sentiments attached with the commercial aircraft manufacturing industry. This factor is a very dominant contributor to industry dynamics and strategic shape of the industry. The strategic importance of national sentiments attached to some companies is explained by Lou Gerstner in his very famous book ‘Who says elephants can’t dance?’ According to Gerstner one of the major reasons he took up to task of bringing IBM back from brink of bankruptcy was the cultural significance and sentiments attached with IBM of both American businesses and people. The same cultural significance lies with the dominant players of the commercial aircraft manufacturers. This factor is significant for both Boeing and Airbus and holds a very significant importance in determining the analysis provided below. The best method to understand the dynamics of any industry is through the porter’s five forces analysis. This model gives a comprehensive analysis of the different forces functioning in the industry and determines industry’s strategic positioning. This model is also very useful in providing a comprehensive analysis of the individual analysis and more importantly contribution to determining the overall positioning of the industry. The model is used for this example is as follow: The most important factor for any industry is the bargaining power of customers. This is a very economics driven phenomenon. This is because the customers function as a whole on factors of demand and supply. The demand factors for an industry determine the power of firms operating in the industry. The substitutability of a product is the key to bargaining power of customers. This can be analyzed by using exampling of medicines and burgers. The customer when buying medicines will have a very small power because this product has a low elasticity of demand. However,