Chapter 6 Analyzing Global Industry and Competitors

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Chapter 6Analyzing Global Industry and
Competitors
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Once we understand global and regional forces in
the international arena, we can focus on them and
use them to our advantage
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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Global Industry Demand,
• Using regression analysis to estimate demand over
  time in aggregate worldwide as well as
  disaggregated regional and national. Why do we
  need to do this?

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Global Industry Demand,
• Using regression analysis to estimate demand over
  time in aggregate worldwide as well as
  disaggregated regional and national. This is
  done to determine where production and
  distribution centers should be.

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Global Industry Demand
• Export Market Demand uses national export
  statistics to locate markets that could be
  serviced from the home base or foreign based
  subsidiaries. This is the other side of the
  equation. The supply side for us, their exports
  and our imports.

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Global Industry Demand
• Export Market Demand uses national export
  statistics to locate markets that could be
  serviced from the home base or foreign based
  subsidiaries. This is the other side of the
  equation. The supply side for us, their exports
  and our imports. In order to identify potential
  markets we require statistics that shows product
  classifications. There are many sources of trade
  statistics.
• the standard international trade
  classificationSITC, shows which nations import
  specific products.
• Nations Trade Data Yearbook, is another source of
  data. These statistics are held by each country
  so they know their position in the global market
  as well as maintaining compliance with WTO rules.

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Global Industry Demand
• Export Market Demand
• Global Consumption and Production Trends. Who is
  buying (selling) what and where

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Locating Import Sources of Supply, Once we know
  who is buying what and where, we need to use the
  same data to see who is selling what are where,
  i.e. we need to secure reliable sources for our
  imports.

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Identifies dominant firms in particular
  industries nationalities, sizes, influence

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Identifies dominant firms in particular
  industries nationalities, sizes, influence
• Industry structures are becoming more global as
  mergers and acquisitions, particularly among
  major players (mega-mergers) are increasingly
  affecting industry competitive landscapes.

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Global Change
• WTO and IMF improve worldwide infrastructures and
  payments mechanisms

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Global Change
• WTO and IMF improve worldwide infrastructures and
  payments mechanisms
• increasing numbers of nations are adopting
  democratic institutions

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Global Change
• WTO and IMF improve worldwide infrastructures and
  payments mechanisms
• increasing numbers of nations are adopting
  democratic institutions
• more markets adopt capitalism and open up

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Global Change WTO and IMF improve worldwide
  infrastructures and payments mechanisms
• increasing numbers of nations are adopting
  democratic institutions
• and more markets adopt capitalism and open up
• Regional political trends trade blocs increase
  and firms look to multi-market brands and supply
  chains

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Global Change
• WTO and IMF improve worldwide infrastructures and
  payments mechanisms
• increasing numbers of nations are adopting
  democratic institutions
• and more markets adopt capitalism and open up
• Regional political trends trade blocs increase
  and firms look to multi-market brands and supply
  chains
• National elections and changes in political and
  economic agendas are constant sources of
  political uncertainty

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Economic Trends
• Global economic growth affects industry global
  demand

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Economic Trends
• Global economic growth affects industry global
  demand
• Regional economic growth affects how firms
  allocate resources among worldwide operations

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Economic Trends
• Global economic growth affects industry global
  demand
• Regional economic growth affects how firms
  allocate resources among worldwide operations
• National economic growth affects country industry
  demand and affects national sales goals,
  manufacturing capacity plans and demand
  management for individual countries

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Economic Trends
• Societal Trends
• National industrialization efforts
• create demand for new types of
• financial services,
• industrial products,
• consumer products (education, healthcare, brands,
  labor-saving products)

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Economic Trends
• Societal Trends
• Global firms have the inside knowledge of
  international markets and therefore know the
  direction of the markets. Therefore they can
  always find a way to jump to the forefront of the
  market. For example, national industrialization
  efforts create demand for new types of financial
  services, industrial products, consumer products
  (education, healthcare, brands, labor-saving
  products)

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Economic Trends
• Societal Trends
• National industrialization efforts create demand
  for new types of financial services, industrial
  products, consumer products (education,
  healthcare, brands, labor-saving products)
• Societal Priorities
• At the regional and country levels, national
  governments push issues onto corporate agenda
  (conservation, recycling, rural development,
  transportation)

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Economic Trends
• Societal Trends
• Technological Trends
• Worldwide Effects of technology on society.

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Economic Trends
• Societal Trends
• Technological Trends Worldwide Effects of
  technology on society on
• Religion reliance on technologies reduces
  religiosity and provides new media outlets for
  alternative viewpoints

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Economic Trends
• Societal Trends
• Technological Trends
• Religion reliance on technologies reduces
  religiosity and provides new media outlets for
  alternative viewpoints
• Demographics better medical technologies have
  lead human longevity enhanced graying of
  national populations

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Economic Trends
• Societal Trends
• Technological Trends
• Societal Effects
• Religion reliance on technologies reduces
  religiosity and provides new media outlets for
  alternative viewpoints
• Demographics human longevity enhanced graying
  of national populations
• Education internet makes vast knowledge bases
  available to a wider potential population.

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Economic Trends
• Societal Trends
• Technological Trends
• Societal Effects
• Religion reliance on technologies reduces
  religiosity and provides new media outlets for
  alternative viewpoints
• Demographics human longevity enhanced graying
  of national populations
• Education internet makes vast knowledge bases
  available
• Popular Culture new international media,
  products and services have made global icons out
  of people and brands

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Economic Trends
• Societal Trends
• Technological Trends
• Societal Effects
• Religion reliance on technologies reduces
  religiosity and provides new media outlets for
  alternative viewpoints
• Demographics human longevity enhanced graying
  of national populations
• Education internet makes vast knowledge bases
  available
• Popular Culture new international media,
  products and services have made global icons out
  of people and brands
• Company Effects of technology
• Technology has transformed how firms do business
  internally and externally via internet and
  intranet.

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Economic Trends
• Societal Trends
• Technological Trends
• Societal Effects
• Religion reliance on technologies reduces
  religiosity and provides new media outlets for
  alternative viewpoints
• Demographics human longevity enhanced graying
  of national populations
• Education internet makes vast knowledge bases
  available
• Popular Culture new international media,
  products and services have made global icons out
  of people and brands
• Company Effects of technology
• Technology has transformed how firms do business
  internally and externally via internet and
  intranet. Internet has made it possible to be in
  touch with customers and customize their services
  to their clients.

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Economic Trends
• Societal Trends
• Technological Trends
• Societal Effects
• Religion reliance on technologies reduces
  religiosity and provides new media outlets for
  alternative viewpoints
• Demographics human longevity enhanced graying
  of national populations
• Education internet makes vast knowledge bases
  available
• Popular Culture new international media,
  products and services have made global icons out
  of people and brands
• Company Effects of technology
• Technology has transformed how firms do business
  internally and externally via internet and
  intranet. Internet has made it possible to be in
  touch with customers and customize their services
  to their clients. It has enabled firms to
  interface their suppliers with their
  distributors.

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Economic Trends
• Societal Trends
• Technological Trends
• Societal Effects
• Religion reliance on technologies reduces
  religiosity and provides new media outlets for
  alternative viewpoints
• Demographics human longevity enhanced graying
  of national populations
• Education internet makes vast knowledge bases
  available
• Popular Culture new international media,
  products and services have made global icons out
  of people and brands
• Company Effects of technology
• Technology has transformed how firms do business
  internally and externally via internet and
  intranet. Internet has made it possible to be in
  touch with customers and customize their services
  to their clients. It has enabled firms to
  interface their suppliers with their
  distributors. It has give small companies an
  opportunity to compete globally.

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Economic Trends
• Societal Trends
• Technological Trends
• Societal Effects
• Religion reliance on technologies reduces
  religiosity and provides new media outlets for
  alternative viewpoints
• Demographics human longevity enhanced graying
  of national populations
• Education internet makes vast knowledge bases
  available
• Popular Culture new international media,
  products and services have made global icons out
  of people and brands
• Company Effects of technology
• Technology has transformed how firms do business
  internally and externally via internet and
  intranet. Internet has made it possible to be in
  touch with customers and customize their services
  to their clients. It has enabled firms to
  interface their suppliers with their
  distributors. It has give small companies an
  opportunity to compete globally. Capital market
  is more competitive.

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Political Trends
• Economic Trends
• Societal Trends
• Technological Trends
• Societal Effects
• Religion reliance on technologies reduces
  religiosity and provides new media outlets for
  alternative viewpoints
• Demographics human longevity enhanced graying
  of national populations
• Education internet makes vast knowledge bases
  available
• Popular Culture new international media,
  products and services have made global icons out
  of people and brands
• Company Effects of technology Technology has
  transformed how firms do business internally and
  externally via internet and intranet. Internet
  has made it possible to be in touch with
  customers and customize their services to their
  clients. It has enabled firms to interface their
  suppliers with their distributors. It has give
  small companies an opportunity to compete
  globally. Capital market is more competitive.
  Intranet has made communication and data
  available to all employees of the companies
  faster and more accurately.

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Financial Benchmarks are important indicators of
  the industry attractiveness and competitiveness.
  These benchmarks are profit rate, return on
  assets, return on sales, etc.

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Financial Benchmarks
• Key Success Factors are those that allow a
  company to prosper and survive such as
• strategic expertise,
• competencies,
• resources, and
• competitive capabilities
• They are different for different corporations
  depending whether they are providing a commodity
  or service.

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Worldwide Industry Analysis

• Evaluations of Worldwide Market Demand
• Assessing Industry Supply Chains
• Industry Structure
• Drivers of Industry Change
• Financial Benchmarks
• Key Success Factors

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Global Competitor Analyses

• Competitors could come from the neighborhood
  (country), region, and worldwide.

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Global Competitor Analyses

• Global Competitor Analysis
• GCA provides insights into rivals strategies

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Global Competitor Analyses

• Global Competitor Analysis
• GCA provides insights into rivals strategies and
  enable companies to
• Outwit Rivals - detect marketplace changes more
  quickly than competitors

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Global Competitor Analyses

• Uses of Global Competitor Analysis
• GCA provides insights into rivals strategies and
  enable companies to
• Outwit Rivals
• Outmaneuver Rivals - Being the first to
  introduce new products and technologies

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Global Competitor Analyses

• Uses of Global Competitor Analysis
• GCA provides insights into rivals strategies and
  enable companies to
• Outwit Rivals - detect marketplace changes more
  quickly than competitors
• Outmaneuver Rivals - Being the first to
  introduce new products and technologies
• Outperform Rivals - In terms of new product
  development, market share, customer satisfaction
  levels and corporate reputation

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Global Competitor Analyses

• Global Competitor Analysis would take place on
  different levels.

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Global Competitor Analysis

• 1-- Internal Assessments
• Corporate missions provide overviews of
  corporate priorities in terms of products,
  markets, technology, and corporate culture

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Global Competitor Analysis

• 1-- Internal Assessments
• Corporate missions provide overviews of
  corporate priorities in terms of products,
  markets, technology, and corporate culture
• Strategic intents relate to long-term
  competitive aspirations of the company such as
  its market position and share

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Global Competitor Analysis

• 1-- Internal Assessments
• Corporate missions provide overviews of
  corporate priorities in terms of products,
  markets, technology, and corporate culture
• Strategic intents relate to long-term
  competitive aspirations of the company such as
  its market position and share
• Core competencies are articulations of what
  companies do better than others their
  acknowledged expertise vis-à-vis the rest of the
  industry. Microsoft and software Unilever and
  everyday products.

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Global Competitor Analyses

• 2-- External Assessments Analyzing Competitor
  Operations
• Total sales and regional breakdowns show current
  revenue streams of competitors and regional sales
  dependencies

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Global Competitor Analyses

• 2-- External Assessments Analyzing Competitor
  Operations
• Total sales and regional breakdowns show current
  revenue streams of competitors and regional sales
  dependencies
• Global demand analyses show recent sales trends
  in specific regions and product areas

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Global Competitor Analyses

• 2-- External Assessments Analyzing Competitor
  Operations
• Total sales and regional breakdowns show current
  revenue streams of competitors and regional sales
  dependencies
• Global demand analyses show recent sales trends
  in specific regions and product areas
• Supply Chain Strategy the efforts firms are
  making to streamline purchasing, manufacturing,
  and distribution activities on a worldwide basis

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Global Competitor Analyses

• 2-- External Assessments Analyzing Competitor
  Operations
• Total sales and regional breakdowns show current
  revenue streams of competitors and regional sales
  dependencies
• Global demand analyses show recent sales trends
  in specific regions and product areas
• Supply Chain Strategy the efforts firms are
  making to streamline purchasing, manufacturing,
  and distribution activities on a worldwide basis
• Strategic initiative analyses highlight
  management priorities in market expansion efforts

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Using Market Opportunity and Competitive Analyses
to Craft Global Strategies

• Global Industry Analysis show us market
  opportunities.

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Using Market Opportunity and Competitive Analyses
to Craft Global Strategies

• Global Industry Analysis show us market
  opportunities.
• Supply chain Analysis shows where to buy
  resources for our production process
• (interface with the suppliers)

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Using Market Opportunity and Competitive Analyses
to Craft Global Strategies

• Global Industry Analysis show us market
  opportunities.
• Supply chain Analysis shows where to buy
• Competitor Analysis shows weaknesses and
  strengths of competition

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Using Market Opportunity and Competitive Analyses
to Craft Global Strategies

• Global Industry Analysis show us market
  opportunities.
• Supply chain Analysis shows where to buy
• Competitor Analysis shows weaknesses and
  strengths of competition
• From these we could craft strategies for market
  share and competitions strengths and weaknesses.

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Using Market Opportunity and Competitive Analyses
to Craft Global Strategies

• Market Selection Strategies
• Large international companies routinely monitor
  market sizes and growth rates in over 150
  national markets large markets and markets with
  potential are always priorities
• Smaller companies may be more selective to avoid
  head-to-head competition

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Using Market Opportunity and Competitive Analyses
to Craft Global Strategies

• Competitive Effects on Strategic Decision-Making
• Companies must not only satisfy customers but
  out-compete market rivals
• Market challengers must be careful how they
  attack strong market leaders but few firms are
  strong everywhere
• Smaller companies lacking global reach or
  resources can use acquisitions, joint ventures or
  global alliances to attack larger competitors
• Large companies can use superior brand names,
  corporate reputations, cost structures, and
  technologies to attack weaker competitors

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Key Points

• Analyzing industries on a worldwide scale
• Evaluation of market demand
• Industry supply chains
• Industry structure
• Industry change drivers
• Financial benchmarks
• Analyses of global competitors

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Key Points

• Analyzing industries on a worldwide scale has
  become essential as companies and industry
  sectors have expanded their global presences
  throughout international markets.
• Worldwide industry analyses starts with
  evaluations of worldwide and regional market
  demand and demand within individual countries.
  Export market demand should also be assessed
  using national and international trade statistics.

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Key Points

• Industry supply chains can be analyzed to assess
  international sources of supply, national
  expertise in manufacturing, and global
  distribution patterns
• Industry structure analyses shows leading
  companies in particular sectors. Firms can then
  isolate individual rivals for in-depth competitor
  analyses of sales and supply chains

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Key Points

• Industry change drivers should be examined,
  including trends in global, regional, and
  national political and economic environments,
  societal and technological trends.
• Financial benchmarks are provide guidelines for
  corporate assessment of business divisions and
  subsidiaries
• Key success factors evaluate where to focus
  corporate efforts what they must do well to be
  successful in their industry

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Key Points

• Analyses of global competitors include
• Internal assessments of
• Rivals corporate missions
• Strategic intents
• Core competencies
• External assessments of
• Global and regional revenue streams
• Trends
• Supply chain strategies
• Strategic initiatives