Analysing the competitiveness of industries using the Analytical Hierarchy Process and Porter’s model: A case of Durgapur city

Abstract

Declining contribution to employment of the steel industry, which used to be the number-one sector in the city of Durgapur (India), leads to a search for alternative employment sources. The article aims to identify the criteria and sub-criteria to reveal the business competence through Porter’s model and ranking of business competence of each industry through the analytical hierarchy process (AHP) for Durgapur. Porter’s Five Forces Framework is used as the methodological basis to find the best alternate industry option based on their competitive position and provides the framework and subsequent criteria to analyse competitiveness. The key research method is the analytical hierarchy process that helps to measure the criteria qualitatively. The empirical evidence comes from the survey of 126 respondents: 36 experts who are well-versed in the industrial development of the city and fixed the weightage of the criteria through the AHP, and 90 industry-specific experts provide the range value for each criterion for each industry, which is used to generate the final value. The paper demonstrates the quantitative framework to establish the competition level of major industries in Durgapur, the strategic framework to support the industrial transition, and a brief about their dual nature of competition. We have figured out nine employment-generating industrial sectors within the city of Durgapur, among which are steel production, information technology (IT), education, healthcare, etc. The IT industry was found to be the most competitive sector that provided additional employment opportunities; it was followed by non-metal production, healthcare, and education.