A dynamic and developing industry is attractive to enter if it has the potential to provide above-average returns and if the firm is confident that it can create a defendable position in the long run. Quite often firms enter dynamic and risky industries whom the existing firms are going rapidly and making good profits or the ultimate size of the industry promises to be large. These are valid reasons to enter the market, but a firm has to ultimately carry out a structural analysis of the industry/environment (Porter’s five forces model) before leaping into the fray.
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