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Strategy & Innovation - Coggle Diagram

- - - - Political, Economical, Sociocultural, Technological, Environmental, Legal
      - CONCLUSION: 1. Business climate; 2. Key drivers of change (factors that might have an impact on the business unit in the future); 3. Build up
        scenarios for the future
      - Used to identify key drivers of change
  - - - 5 Forces of Porter
        
        Competitive rivalry
        
        Organ. w/ similar P/S for the same customer group
        
        High when: Perfect competition; Low industry growth rate or decline; Undifferentiated products w/ low costs for cust.
        
        Threat of Substitutes
        
        Substitutes = P/S that offer a similar benefit but by a diff. process/industry (ex:
        Butter/margarine, beer/wine, coffee/tea, train/plane)
        
        Availability of a product that the consumer can purchase from another industry
        
        Bargaining power of suppliers
        
        The pressure that suppliers can put on companies by raising their Pxs, lowering their qlty, or reducing the availty. of their products
        
        High when: High switching costs; Lot of large suppliers
        
        Bargaining power of buyers
        
        High when: Low switching costs; Px sensitive if weak/delayed demand; Large buyers (superm.); Few buyers for many sellers...
        
        The pressure that customers/consumers can put on businesses to get them to provide higher quality products, better customer service, and/or lower prices
        
        Threats of new entrants
        
        Economies of scale; K reqrmts; Access to supply or distribution channels; Expected retaliation; Legislation or government action; Differentiation & brand loyalty (coke/pepsi); Netfwork effects
        
        Threat that new competitors pose to current players within an industry
        
        Consequences
        
        Non attractive industry when:
        
        High rivalry among competitors
        
        High threat of entry
        
        Strong threat of substitutes
        
        Strong bargaining power of suppliers & buyers
        
        Attractive industry when:
        
        Moderate rivalry
        
        Weak threat of entry
        
        No substitutes
        
        Weak bargaining power of suppliers and buyers
        
        Compare the model over time
        
        Radar plot
        
        5 axes; Power diminishes as the axes go outwards (high inside/low to outside); The area enclosed = potential profit
    - - Industry life cycle analysis
        
        Stages
        
        Industries vary widely in the length of their stages
        
        Development (Low rivalry w/ high differentiation)
        
        Growth (Low rivalry w/ high growth & weak buyers + low entry barriers)
        
        Shake out (Slower growth & managerial + financial strenghts)
        
        Maturity (Low growth, perf. susbt. standard products, high entry barrier, market share)
        
        Decline (Extreme rivalry w/ many exists & px comp.)
  - - - Ex: Car industry (Luxury, Conservative, Sports, Family car)
- - - - Firm’s resources & capabilities => primary drivers of competitive adv. & econ. perf.
        
        Resourcing for R&D:
        • Build sports car
        • Roadster - $110K
        Use that money to build an affordable car:
        • Model S - $73.5K
        • Model X - $100K
        Use that money to build an even more affordable car:
        • Model 3 - $35K
      - Resource
        
        Tangible or intangible asset of a company, used to choose & implement its strategies => What we have (ex: K; Patents...)
        
        Productive input or competitive asset that is owned or controlled by an organization
      - Capability (Competence)
        
        Capacity to deploy resources for a desired end result => What we do well (ex: R&D, agility...)
      - Resources + Capabilities = Core competencies -> Activities -> Competitive adv. -> Sup. firm perf.
      - Organizations competences
        
        Competence
        
        Capability that a firm has learned to perform with proficiency
        
        Core competence
        
        Internal activity performed w/ proficiency that is central to a firm’s strategy & competitiveness
        
        Distinctive competence
        
        Competitively valuable activity that a firm performs better than its rivals
        
        Example: Tiffany => elegant jewellery design & craftsmanship delivered through a superior cust. exp. that is valuable, rare, & costly for competitors to imitate
        
        Example 2: Hermes => high quality craftsmanship of leather goods that allowed it to transform from making harnesses & bridles to crafting suitcases
      - VRIN (Valuable, Rare, Inimitable, Non-substituable)
        
        4 criteria to assess core resources/competence ability to achieve/sustain competitive adv.
        
        Valuable (contribute to competitive adv. and profitability): Talents, technology...
        
        Value-adding resources & capabilities may become obsolete (non-value-adding)
        
        Non-value-adding R&C may create competitive disadv. (=weaknesses)
        
        Rare (not freely/easily available to other companies in the industry) => short-term
        
        Raw materials, Big data, Networks...
        
        Inimitable (How difficult & costly is it for competition to imitate or obtaining the resource? => Intangible resources are harder to imitate)
        
        Unique; Social complexity; Historical pattern; Causal ambiguity
        
        Cannot be imitated => Patents Unique location Unique assets (e.g. Mineral rights)
        
        Difficult to Imitate => Brand Loyalty Favorable cost position Employee Satisfaction Reputation, Culture
        
        Can be Imitated (but may not be) => Economies of Scale
        
        Easy to Imitate => Cash Commodities
        
        Non-susbtitutable
        
        Valuable, rare & hard-to-imitate capabilities may still be at risk from substitution
        
        2 possibilities exist => Product or service substitution (email replacing postal system); Competence substitution (ex: automation: craft workers being replaced by machines, or vice-versa)
        
        Disadvantage; Parity; Temporary Advantage; Sustained Advantage
- - - - Star (Apple watch); Qts mark (Home pod); Cash cow (iPhone); Dog (iPod)