Six Segments Analysis (Competitive Strategy)

The first step to understanding in understanding whether a company's competitive strategy is sustainable is understanding the macroeconomic environment. Here, the question we want to answer is: Is the company's edge based on external trends such as government or from internal processes?

One example that comes to mind is Lan Airlines who derives its value from monopolizing the airline industry in Chile with government support vs Southwest Airlines who derives value from a strong culture and cost leadership. Lan Airlines derives its competitive advantage  from the benefits of government who protect the industry from outside competition, which can then be considered arguably sustainable - since other companies cannot produce the same relations.

The six categories of the industry environment are

1. Demographic: Biggest Change in US includes aging population - Baby boomers.
2. Economic: The economy lately has been in a slump but optimistic about improvement
3. Socio Cultural: What are the new trends? Do people prefer hipper clothes?
4. Global/Environment: Natural disasters, natural resources?
5. Technological: New expansions in technologly
6. Political/Legal: What are the political and legal factosr?