Chapter 3 External Analysis: The Identification of Industry Opportunities and Threats - PowerPoint PPT Presentation

Loading...

PPT – Chapter 3 External Analysis: The Identification of Industry Opportunities and Threats PowerPoint presentation | free to view - id: 113f54-ZTZiZ



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Chapter 3 External Analysis: The Identification of Industry Opportunities and Threats

Description:

Opportunities and threats are competitive challenges arising for changes in industry ... (oligopoly) Consolidated. One firm or one. dominant firm (monopoly) 3-7 ... – PowerPoint PPT presentation

Number of Views:340
Avg rating:3.0/5.0
Slides: 22
Provided by: glsre
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Chapter 3 External Analysis: The Identification of Industry Opportunities and Threats


1
Chapter 3External Analysis The Identification
of Industry Opportunities and Threats
2
Analyzing Industry Structure
  • Opportunities and threats are competitive
    challenges arising for changes in industry
    conditions.
  • Analytic tools such as the five forces model
    help managers formulate appropriate strategic
    responses.

3
The Five Forces Model
4
Potential Competitors
  • New entrants into an industry threaten incumbent
    companies.
  • Barriers to entry
  • Brand loyalty
  • Absolute cost advantages
  • Economies of scale
  • Switching costs
  • Government regulation
  • Entry barriers reduce the threat of new and
    additional competition.

5
Rivalry Among Established Companies
  • The intensity of competitive rivalry in an
    industry arises from
  • Industrys competitive structure.
  • Demand (growth or decline) conditions in
    industry.
  • Height of industry exit barriers.

6
Competitive Structure
7
The Bargaining Power of Buyers
  • Buyers are most powerful when
  • There are many small sellers and few large
    buyers.
  • Buyers purchase in large quantities.
  • A single buyer is a large customer to a firm.
  • Buyers can switch suppliers at low cost.
  • Buyers purchase from multiple sellers at once.
  • Buyers can easily vertically integrate to compete
    with suppliers.

8
The Bargaining Power of Suppliers
  • Suppliers have bargaining power when
  • Their products have few substitutes and are
    important to buyers.
  • The buyers industry is not an important customer
    to the supplier.
  • Differentiation makes it costly for buyers to
    switch suppliers.
  • Suppliers can vertically integrate forward to
    compete with buyers and buyers cant integrate
    backward to supply their own needs.

9
Substitute Products
  • The competitive threat of substitute products
    increases as they come closer to serving similar
    customer needs.

10
A Sixth Force Complementors
  • Complementors
  • Companies whose products are sold in tandem with
    another companys products.
  • Increased supply of a complementary product
    collaterally increases demand for the primary
    product.
  • Example
  • Faster CPU chips fuel salesof personal computers.

11
The Role of the Macroenvironment
12
Strategic Groups Within Industries
  • The concept of strategic groups
  • Within an industry, a competitor grouping using
    similar strategies that differ from other
    industry groups.
  • Implications of strategic groups
  • The closest industry competitors are those in the
    group.
  • The various industry groups are differentially
    and competitively advantaged and positioned.
  • Mobility barriers inhibit the movement of
    competitors from one strategic group to another.

13
Strategic Groups in the Pharmaceutical Industry
14
Limitations of the Five Forces and Strategic
Group Models
  • Both models are static and ignore innovation.
  • Their focus is on industry and group structures
    rather than individual companies.
  • Innovation creates change in industry
    structures, altering thecompetitive environment.
  • Industry structure cannot fully explain the
    performance differences between industry
    competitors.

15
PunctuatedEquilibriumandCompetitiveStructure
16
The Industry Life Cycle Model
  • Stages in the industry life cycle

17
Growth in Demand and Capacity
18
Network Economics As a Determinant of Industry
Conditions
  • The demand for primary industry products depends
    on the size of the total market for complementary
    products.
  • Network economics result inpositive feedback
    loops that foster rapid demand increases.
  • Market competitors are protected by switching
    cost entry barriers.

19
Positive Feedback in the Computer Industry
20
Globalization and Industry Structure
  • Globalization
  • Globally dispersed production lowers costs and
    increases quality.
  • Global markets are replacing national markets.
  • Trend implications
  • No isolated national markets
  • More competitors, more intense competition
  • More rapid innovation and shorter product life
    cycles

21
The Nation-State and Competitive Advantage
  • The determinants of competitive advantage
About PowerShow.com