Purpose – The purpose of this dissertation is twofold. First, to identify and design a theoretical model of different factors that are important when evaluating fast changing industry environment. Second, to conduct interviews designed after the model and determine what factors are important within the company’s specific industry.

Design/methodology/approach – A range of published research literature on Industry environment such as clusters, innovation and hyper competition has been used in this thesis. Our main approach has been to follow Porter’s Five Forces Model and applying it on the modern IT-industry.

Findings – This research identified three additional forces for evaluating industry environment, namely Innovation, Complementary product & Cooperation and Customer Readiness.

Limitations – The research was limited to northeastern Öresundsregionen, Sweden. The interview questions where limited to pre-designed factors. 

Originality/value – The findings of this research provide the companies and researchers with a context for understanding this specific type of industry environment. It will also provide companies with a set of tools and best practices to apply when evaluating their own environment.