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Problem

Why should firms consider industry, resource, and institutional factors in developing strategy?

Step-by-step solution

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Step 1/3

Strategies are basic needs in the world of competitive advantage. It is important to be knowledgeable as well as develop unique capabilities for sustaining in the hypercompetitive environment.

Step 2/3

Firms must consider industries, resources as well as institutional factors in developing strategy due to the following reasons:

• Resources as well as industries are important for strategy implementation. They help in the economic development of the firms.

• Industries contribute to income generation as well as provide employment opportunities. It helps in increasing resource efficiency as well as facilitating international trade. Cheap resources can be targeted to maximize production. Institutional factors like research, inequality as well as labor markets are also equally important.

• Focusing on the given things will help to survive in the hypercompetitive market.

• The development of strategies will also help in meeting the standards as well as conditions of the market. These will help in attracting customers, increasing demand as well as developing premium products in the market.

Step 3/3

As stated above, these are the reasons why firms must consider industries, resources as well as institutional factors in the development of strategy.