Driving forces analysis aims to identify what the driving forces in an organization are. It assesses if the drivers of change work to make the industry more or less attractive. It also determines what strategy changes are needed to prepare for the impact of the driving forces. Drivers can be thought of as clusters of trends that creates changes or influences change to industry structure and competitors’ actions.
Advantages Include:
- Necessary element of several other analytical techniques.
- Has an above average level of managerial agreement.
- Can be accomplished with a less data intense manner than other techniques.
- Does not require continual data gathering.
Driving forces analysis is a two step process. The first analytical task of driving force analysis is to identify the driving forces and to separate the main causes of industry change from those that are less important. The second step is to access the impact the driving forces will have on the industry.
Driving forces analysis was first created in the 1950s to help businesses and individuals deal with changes in business. Driving force analysis helps understand and account for change at the industry level.