The global recession forced thousands of firms into bankrupt

The global recession forced thousands of firms into bankruptcy. Does this fact alone confirm that \"external factors are more important than internal factors\" in strategic planning?

Solution

Proponents of the Industrial Organization (I/O) view contend that external industry factors are more important than internal factors for a firm to achieve competitive advantage. The impact of the global economic recession on both strong and weak firms has added credence to this notion, since thousands of internally strong firms in 2006/2007 disappeared in 2008/2009. However, it is not a question of whether external or internal factors are more important in gaining and maintaining competitive advantage. Effectively integrat ing and understanding both external and internal factors is the key to securing and keeping a competitive advantage.