Strategy ch 3- Industry analysis

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Author:
amck
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215945
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Strategy ch 3- Industry analysis
Updated:
2013-04-26 12:58:11
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Strategy Industry analysis
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Strategy ch 3- Industry analysis
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  1. Industry environment
    • Suppliers
    • Competitors
    • Customers
  2. Objectives of industry analysis
    • 1) Understand how industry structure drives competition
    • 2) Assess industry attractiveness
    • 3) Use Evidence on changes in industry structure & Forecast future profitability
    • 4) Formulate strategies to change industry structure to improve industry profitability.
    • 5) Identify Key Success Factors
  3. Determinant of industry profitability
    • 1) value if product to customer
    • 2) Intensity of competition
    • 3) Relative bargaining power @ diff levels in chain.
  4. theory of monopoly
    • Single firm
    • high barriers to entry
    • potential 4 product differentiation
    • imperfectly availability of info
  5. theory of perfect competition
    • Many firms
    • identical products
    • no restrictions to entry/exit
    • homogeneous product
    • perfect information flow
  6. Theory of oligopoly
    • industry dominated by few major firms,
    • significant barriers to entry
    • potential 4 product differentiation
    • imperfect availability of info
  7. porters 5 forces
    • 1) suppliers
    • 2) buyers
    • 3) substitutes
    • 4) potential entrants
    • 5) industry competitors/ rivalry
  8. Buyers price sensitivity


    Relative bargaining power
    • cost of purchases as % of buyers total costs.
    • The less differentiated the item the more likely the buyer will switch supplier based on price. More competition in the industry leads to suppliers pressured 2 decrease prices



    • Smaller no of buyers & bigger their purchases the greater the cost ¬†of loosing one. The better informed buyers are about suppliers and the prices and costs, the better able they are to bargain.
    • A firms ability 2 vertically integrate reduces their dependance on suppliers
  9. Industry analysis
    • 1) identify the industry structure
    • 2) forecast industry profitability
    • 3) positioning the company
  10. Identifying KSF's
    • 1) WHAT DO CUSTOMERS WANT?
    • 2) HOW DOES THE FIRM SURVIVE THE COMPETITION

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