Chapter 6. Is this a Good Business to be in?

Competitive position and the competencies that underpin it are one thing – the attractiveness of an industry or market is something different again. One determines whether you win the race, the other how much the race is worth. There have been long and boring disputes about the relative importance of the two factors, but we need not bother with these. At the extreme, an industry where nobody makes money and never will is of no interest, and even a leadership position in this situation is worthless. Moreover, there are industries (albeit very few) where almost everyone makes very high returns, regardless of competitive position. Our experience is that industry attractiveness on average explains about ...

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