The Nuclear Unit of Strategic Analysis

Abstract

The previous chapter established the foundation for strategic logic: a business is profitable as long as it is not exposed to perfect competition, that is, while it can benefit from sustainable singularity, because competitors, for some reason, either cannot offer the same (or something truly equivalent) to their clients, or they can only do it by incurring higher costs. Therefore, we have been able to establish that the potential profitability of a business depends on the entry barriers to it, barriers that depend in turn on the structural characteristics of the business. This principle is the basis on which we have to construct our understanding of managerial reality.