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[BS-2] External Analysis, Group2 Team members, 2-2.3 Applying the 5…

- - - - meet similar needs
      - better cost structures
      - more innovative or value providing
      - improving quickly in costs or performance
    - - Intensity of rivalry is higher
        
        Fixed/storage costs are high
        
        Demand growth is slow
        
        Product differentiation is low
        
        Over-capacity is high
        
        Industry concentration is low
        
        Exit barriers are high
      - rivalry are good for industry profitability
        
        Introducing new products,technologies and advertising
      - rivalry is bad for industry profitability
        
        Rivalry descends into pure price competition ,it becomes a lose-lose proposition for all firms in the industry.
        
        Solution
        
        Product differentiation
      - Barriers to price rivalry
        
        Industry concentration
        
        High
        
        Lead to less price rivalry
        
        Four-firm concentration ratio
        
        Consists of the market share of the four largest firms in an industry
        
        HHI
        
        Calculated as the sum of the squared percentage market shares of all firms in an industry
        
        Low fixed / storage costs
        
        Demand growth
        
        Limited over-capacity
        
        Low exit barriers
    - - product reliance on buyers
      - buyer’s switching cost
      - the quantity purchased by the buyer
      - buyer's ability to integrate backwards
      - buyer concentration
    - - Expected Retailation
        
        Aggressive pricing,advertising,new products
        
        Reputation,slow growth, high exit costs
        
        Strategic entry barriers
        
        If the existing firms are well-resource and have idle excess capacity, it also makes them more capable of retaliation
      - Natural entry barriers
        
        Product
        
        Product differentiation
        
        Customers are already loyal to some existing products, brands, or companies in the industry
        
        Find it more difficult to reach or win over customers, and so it becomes difficult for them to build demand
        
        Capital
        
        Capital requirements
        
        You simply have to make a very large investment, but this industry very risky and irreversible
        
        Cost
        
        Scope economies
        
        You produce a few different products together,the cheaper it gets per unit
        
        More difficult to develop a cost-competitive production base
        
        Experienced curve economies
        
        The more experience in producing product,the lower its cost
        
        Scale economies
        
        The more you produce, the cheaper it gets per unit
        
        Channels
        
        Access to distribution channels
        
        1.shelf space in retail stores is very limited 2.the logistics of distribution are just so complicated and expensive to build
        
        Other
        
        Government regulations
        
        Favorable locations
        
        Access to raw materials
        
        Difficult to imitate technologies and processes
    - - few suppliers control
      - few substitutes
      - buyer's high adhesion to the product
      - forward integrate
- - - - volunteers with people who drink cola regularly
        
        make a table to analyze
        
        the result doesn't match with the fact
      - by listening and feeling only
        
        the result is neither Coca-cola nor PepsiCo
        
        our sense of taste and smell are not objective
  - - - create huge global demand
        
        simple ingredient
        
        flavoring
        
        sweetener
        
        carbonated water
        
        packaging
- - - - Decide which product-markets
      - Intervene to increase the profitability
      - Understand an industry
        
        An industry impacts on companies' profitability
        
        Industry effect accounts for 21%
        
        1/5 of its predictable profitability
- - - - vital health need
      - insurance coverage
      - low bargaining power
    - - patent protection
        
        generic drugs
    - - highly differentiated products
      - brand loyalty
    - - mostly commodities
    - - significant and risky R&D investment
      - patent protection
      - the capabilities for marketing or get regulatory clearances
- - - - easy to lease plane ＆ crew
      - easy to buy lease gates ＆ landing slots
      - undermines airline industry profitability
    - - fuel and labor have bargaining power
    - - perishable airline seats
      - high fixed cost
      - undifferentiated service
      - low price
    - - matter to a lesser extent
- - - - S : Social
        
        Urbanization
        
        Aspirations to Western lifestyles
        
        Middle class
        
        Environmental consciousness
        
        Green living
        
        Desire for convenience
      - T : Technological
        
        Electric & Hybrid cars
        
        Solar & Battery infrastructure
        
        Self-driving
        
        Ride apps
      - E : Economic
        
        Economic growth
        
        Economic stability
        
        Interest & Exchange rates
      - E : Ecological
        
        Used car waste & recycling
        
        Air pollution
        
        Climate change
      - P : Political
        
        Transportation & Energy
        
        Openness to trade & investment
        
        Regional Stability
      - L : Legal
        
        Trade & Investment treaties
        
        Environment pollution treaties
        
        Labor
        
        Liability tort
    - - Governments
        
        National
        
        Local
        
        Regional
        
        State
      - Political sensitivities
        
        Stability
        
        Security
        
        Corruption
    - - Economic growth
      - Employment
      - Inflation
      - Interest & Exchange rates
      - Economic inequality
    - - Values & Culture
      - Individual aspirations & Expectations
      - Demographic trends
    - - New business models
      - Progress & Operational innovation
      - Trends in R&D and innovation
    - - Sustainability
      - Conservation
      - Pollution
      - Climate change
    - - Courts in different jurisdictions
        
        Statutory provisions
        
        Areas of law
      - International laws & treaties
      - Antutrust
      - Labor
      - Liability tort
    - - Environmental trends mean for
      - Implications for a company industy
      - How to respond
- - - - Attuned to the regulatory environment.
        
        Focus on the legal and regulatory environment.
      - Got a normal disruption from potential competitors.
  - - - Make consumer friendly and regulatory friendly products.
- - - - Technology trends
      - Consumer social cultural changes