Strategy Praxis by George Tovstiga

Author:George Tovstiga
Language: eng
Format: epub
ISBN: 9783031406928
Publisher: Springer Nature Switzerland

While firms, of course, choose which industries and markets to compete in, they have no control over the rules of competition in those industries and markets. These are defined by the CFs and CSFs in those industries and markets. That being said, however, individual firms can influence the evolution of these factors in certain circumstances. Individual firms, for example, can introduce competitive benchmarks that influence the evolution of CFs and CSFs in their industries and markets. Consider the impact that Apple’s launch of its iPhone in 2007 had on the smartphone market. The iPhone essentially redefined the market’s conception of a smartphone. Once established in the marketplace, however, the distinguishing features of the iPhone set critical standards that shaped consumers’ expectations and demands in subsequent generations of smartphones.

Collectively, CFs and CSFs comprise the set of requisite competitive factors stipulated by an industry and market. Individually, however, CFs and CSFs differ distinctly. The distinction has important strategic implications. Competing factors comprise factors that qualify a firm to compete. CFs can be thought of as the minimum requirements a firm must fulfil to be considered a contender in an industry and market at all. Fulfilment of CFs does not, however, provide a firm with any competitive advantage; a firm’s competitors also fulfil these. Critical success factors, on the other hand, define conditions critical to the achievement of competitive advantage in a given industry–market context. CSFs comprise those factors that, if fulfilled, differentiate a firm from its competition. CSFs are therefore highly strategically relevant. Arguably more so than any other factor rubric, CSFs define the value differentiation potential of a marketplace. Fulfilment of competing factors provides a firm with a ‘license to play’; fulfilment of critical success factors endows a firm with a ‘license to win’.

It is important to note that all firms are subject to both CFs and CSFs. As a rule (but, as always, with some exceptions), competing factors (CFs) reflect industry-related factors and generally reflect operational requirements. Critical success factors (CSFs), on the other hand, tend to centre on strategic requirements relevant to an immediate marketplace—bearing in mind that firms operate within an industry environment, but compete directly at a market level. A firm endowed with a ‘license to win’ fulfils not only the relevant CSFs defined by a market but, of course, also the CFs prevailing in the relevant industry. Table 4.1 summarises some generic attributes that distinguish CFs and CSFs.Table 4.1Competing factors (CFs) and critical success factors (CSFs)—distinctions

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