External Analysis
The Industry
Main player categories
Potential entrants
Suppliers
Customers
Regulators
How to analyse the data related to the above
e.g. threat of new entrants
Bargaining power of suppliers
How do you test or support the results of the above through evidence :
How do you know the answers are correct?
Evidence that corroborates your points
Theories/Journals etc.
5 (6) Forces -
Industry Environment Analysis
Threat of new entrants
Rivalry among competing firms (within the industry)
Bargaining power of suppliers
Bargaining power of buyers
Threat of product substitutes
Complements
General Environment
Is the industry becoming less/more attractive?
On average, how well do firms in our industry do in terms of profitability and growth?
Are emerging new entrants, products, or technologies changing the value of the incumbents' existing offerings?
How is the bargaining power of buyers and suppliers evolving?
Does any one buyer or supplier possess pricing power?
Clayton Christensen
Barriers they need to break down
Need to analyse and articulate the bargaining power and their willingness to pay
Competitors
Do they excel in product leadership?
For quality?
Customer intimacy focused on service and customer relationships?
Do they excel in operational excellence & low cost?
Do they compete in mass markets or create a perception of scarcity?
How do we "widen the wedge" between cost and customer's willingness to pay?
Who are these competitors?
Current and future strategies
Capabilities
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How can you frame the intensity of the rivalry
amongst existing firms
Need to analyse and articulate the bargaining power and their
willingness to pay
Methods
PESTEL
PEST
Broad Factors Analysis
5(6) Forces
Industry SWOT
Value Chain