REDHAT: Identifying Competitive Advantage and Revenue Streams

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REDHAT Identifying Competitive Advantage and
Revenue Streams
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Key Issues

• Definition of industry
• Definition of product
• Source of revenues
• Liability of newness and small size
• Rivalry vs. commensalistic co-existance

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Financial Highlights
4
RHAT Stock Price
150
20
Aug 1999
Sept. 2000
5
External Analysis

• Opportunities

• Threats

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General Environmental Forces

• Social
• Political
• Technological
• Global
• Legal
• Economic
• NET EFFECT?

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Competitive Environment
Threat of New Entrants
Threat of New Entrants
Rivalry Among Competing Firms in Industry
Bargaining Power of Buyers
Bargaining Power of Suppliers
Threat of Substitute Products
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Internal Analysis

• Strengths

• Weaknesses

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Where is Revenue Stream?
Firm Infrastructure
Human Resource Management
MARGIN
Technological Development
Procurement
Service
Inbound Logistics
Marketing Sales
Outbound Logistics
Operations
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Market for Fragmented Product
Programmer- Customers
Mainstream Customers
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Market for Fragmented Product
Programmer- Customers
Mainstream Customers
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Market Maker
Programmer- Customers
REDHAT
Mainstream Customers
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Network Centrality as Advantage
Programmer- Customers
Debian
REDHAT
Mainstream Customers
Applications Vendors
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Mission and Goals

• Mission/vision
• Define industry, values, customers, etc.
• Overall strategic approach
• Goals
• Financial
• Strategic

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Source of Competitive Advantage
Cost
Uniqueness
Cost Leadership
Broad Target Market
Different.
Breadth of Competitive Scope
Focused Different.
Focused Low Cost
Narrow Target Market
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Strategic Recommendations

• Do XX
• Value chain activity a
• Value chain activity b
• Result Eliminates vulnerability to SWOT
• Do YY
• Value chain activity a
• Value chain activity c
• Result Establishes differentiated competence and
  revenue stream