A thesis is presented on the industry structure and competition strategy analysis based on graph theory in which the industry structure is characterized by graphs and the performance and strategic conducts are evaluated from the graphs. A model proposed called position-competition-strategy outlines the causal flow for a firm to assess its performance given its position and competition states in the industry. Then the analysis starts with defining the industrial structure by graphs describing the relationship of the players in the industry. The internal activities in the industry players are reflected in the density of the nodes and the strength of the links in the graph where each is associated with a vector of two parameters, the degrees of concentration and the integration, to characterize the competition and cooperation activities in the industry. The topology of the graph and its associated characteristic vectors together defines the firm’s industry structure. Henceforth, the state of the firm is identified by the corresponding position and competition graphs from which the firms’ performance can be evaluated and can be further improved via strategy applications. A formal treatment on industry structure and strategy analysis is presented. In the formulation, some properties and definitions that comprise the industry topology foundation, such as homeomorphism and homogeny, are provided. From that ground, also encompassed are the discussion of changes in the industry structures due to contraction and expansion. Then, based on the industry topology, the theory of strategy is established in which a strategy is defined as a series of logically connected conducts that transform the firm’s industry state from one to another, resulting changes in performance. Some intrinsic properties and examples associated with the strategy theory such as consistency and coherency are also addressed accordingly. In particular, a class of linear strategy where the transformation can affect any player in the industry is discussed. Throughout the text, examples from several technological sectors are illustrated to assist in understanding our framework and methodology.