Now that you have the broad picture of the nature of industries, you need to understand how your specific industry works—its structure, opportunities, and potential threats. For years the work of Michael Poiter has provided a way of looking at the structure of an industry. Porter's basic premise is that sustaining high performance levels in an industry requires a well-thought-out strategy and implementation plan based on knowledge of the way the industry works. Rent apartment Bucharest Porter asserts that there are five forces in any industry that affect the ultimate profit potential of a venture in terms of long-run return on investment. His Five Forces framework is a way to classify the industry structure so that a strategy for entry and sustained growth can be developed.
While Poiter's work still serves as a useful guide for strategic planning for most businesses, it may not, in its classical form, meet the needs of businesses in the new economy, particularly those in cyberspace. Researchers Larry Downes and Chunka Mui assert that any industry whose primary product or service includes information is in the process of major technological shifts and cannot wait for traditional planning processes. They balk at the notion that the future in information-based industries can be predicated on current conditions, claiming that the frequent technology shifts since 1996 have made forecasting a difficult task. Rent apartment Bucharest furthermore, every industry is affected by information technology and is experiencing the revolutionary changes it has wrought. So, while not every industry is as volatile as the digital industries, every industry must understand the changes, adapt to them, and use them to their competitive advantage.
Table 4.1 compares and contrasts a traditional view of an industry with the more recent digital view.
Both these views of an industry have merit. For the rest of this section, we will use Porter's Five Forces framework and add a sixth force, technology, as suggested by Downes and Mui, to discuss the kinds of information about an industry you will need to collect. The six forces are as follows:
1.    Barriers to new businesses in the industry
2.    The power of suppliers to affect your strategy
3.    The threat of substitute products
4.    The power of buyers to affect your strategy
5.    The degree of rivalry among competitors in the industry4
6.    Technology

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These are the forces that drive competition and affect the long-run profitability of the new venture as well as of other firms in the industry. Such things as economic forces, changes in demand, material shortages, technology shifts, and so forth, by contrast, affect short-run profitability. Let's look at each of these forces in more detail.