An industry’s key success factors (KSFs) are those competitive factors that most affect industry members’ ability to prosper in the marketplace. KSFs by their very nature are so important to future competitive success that all firms in the industry must pay close attention to them or risk an eventual exit from the industry.
Key success factors are the strategy elements, product attributes, competitive capabilities, or intangible assets with the greatest impact on future success in the marketplace.
An industry’s key success factors can usually be deduced through identifying the industry’s dominant characteristics, assessing the five competitive forces, considering the impacts of the driving forces, comparing the market positions of industry members, and forecasting the likely next moves of key rivals.
Only rarely are there more than five or six key factors for future competitive success. Managers should therefore resist the temptation to label a factor that has only minor importance a KSF.
