Firm Performance
industry performance
Relative position within industry
sources of competitive advantages
analysis requirement
Analyse a company’s strategy in a systematic and rigorous way
Assess industry attractiveness
Assess market attractiveness and market positioning
Be able to evaluate the impact of strategic innovation and change
Make recommendations on how to attain sustainable competitive advantage
course approach
Rigorous, quantitative analysis of each slice
Using frameworks to reason analytically
Practice grounding arguments and reasoning with data and evidence rather than guesswork and arm waving
Recognize that there is no single “right” answer in strategy but that does not mean that all answers are right
Timing
industry
corporate strategy
business strategy
factors
industry structure
rules of competition
Inter-industry performance differences
Intra-Industry Performance Differences: Business-Level Strategy
strategies
differentiation
Intra-industry performance difference: corporate level strategy
strategic innovation
Product scope and diversification
Geographic diversification and international strategy
5 forces
Bargaining power
Threat of substitutes
Threat of new entrants
Rivary among existing competitors
define industry
buyers&suppliers
factors
number, size, & concentration
credible threat of forward / backward integration
existence of acceptable alternative supplies / goods or services to buy
importance of supplier to industry / industry to buyer
importance of industry to supplier / buyer to industry
extent to which product is standardized of differentiated (e.g., commodities)
switching costs
factors
Regulation and Government Policy (e.g., financial services)
Economies of Scale and/or Scope (e.g., automobiles)
Brand (e.g., Kellogg)
Capital Requirements (e.g., alternative energy)
Access to Distribution Channels or Critical Suppliers (e.g., diamonds)
Patents
Anticipated response of incumbents
basis
price competition? other dimensions?
structure? Conduct?
how intensely?
aggressive vs muted responses
coordinated vs independant pricing
How to Use 5 Forces?
industry dynamics: the impact of trends that may affect industry, by filtering each through the Five Forces
Industry-‐level recommendations: Identify ways
that your firm can act to improve overall industry structure
Firm-‐level recommendations: Identify ways that your firm can take advantage of industry structure to ensure that it achieves superior profitability
cost advantage
WHO-WHAT-HOW
WHO: is our customer/stakeholder?
customer/stakeholder segments
geographic regions
WHAT: do we sell/provide to our customers/stakeholders?
in terms of products & services
HOW: do we make, market and distribute products to customers/stakeholders?
in terms of manufacturing
in terms of how to get the products to the customers