Commentary

The business mission restricts the nature of the alternatives available for consideration, when measured in terms of customer needs. Thus, with rare exceptions, an organisation will not move into areas in which it has little or no expertise, although there are those exceptions where conglomerates have developed covering a wide range of seemingly unrelated activities. However, assuming that a “mission” has been defined, a number of strategic alternative courses of action will present themselves. The choice of which course(s) to follow will now depend essentially on comparing (and minimising) the risks involved, an exercise which will involve two principal and interrelated tasks assessing one's capabilities in the chosen broad areas of the business and comparing them with those of potential competitors. The tasks are very much interrelated, as consideration of one's capabilities in isolation is essentially adopting an internal approach, something which is anathema to the prevailing competitive market conditions. Porter postulates that there are five basic sets of forces governing competition in an industry.