BMGT 495 industry analysis spring 2011

BMGT 495 industry analysis spring 2011 - Copyright 2009...

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Unformatted text preview: Copyright 2009 Click to edit Master subtitle style INDUSTRY ANALYSIS Dr. Knight BMGT 495: Business Policies Spring 2011 Copyright 2009 The Strategic Management Process Objectives External Analysis Internal Analysis Strategic Choice Strategy Implementation Competitive Advantage Mission Source: Barney/Hesterly Copyright 2009 HOW SHOULD YOU THINK I n d u s t r y a n d c o C o m p a n y r e s o u r Strategy that fits Copyright 2009 Analysis of the External Environments General environment Focused on the future Industry environment Focused on factors and conditions influencing a firms profitability within an industry Competitor environment Focused on predicting the dynamics of competitors actions, responses and intentions Copyright 2009 Industry Environment Industry Defined A group of firms producing products that are close substitutes Firms that influence one another Includes a rich mix of competitive strategies that companies use in pursuing strategic competitiveness and above- average returns Copyright 2009 { 6 D D 0 9 C B -8 5 2-E 7 4 6 -B E 8 -B F D 7 1 D D 7 D 7 A 7 } 5. Industry Competitors Intensity of Rivalry { 5 F 6 7 8 4 B 5 -9 F 7 2 -C F 4 9 -9 C 8 F -2 D 7 A 5 6 0 1 7 1 1 } 2. New Entrants { 9 3 B 8 9 2 D 4 -E C 6 F -9 8 4 2 -8 C 6 0 -E 1 5 F 0 C A 0 E A 4 } 3. Buyers { 2 6 8 6 1 E 0 -D F 9-4 6 4 F -B 8 C 2 -3 D B A 0 4 5 8 3 4 5 } 4. Substitutes { 7 5 A 7 C A 6 -6 1 C E -9 4 5 -8 F 1 5 -5 F 7 3 B A 8 6 9 8 7 } 1. Suppliers 1. Determinants of supplier power Differentiation of inputs Switching costs of suppliers and firms in the industry Presence of substitute inputs Supplier concentration Importance of volume to supplier Cost relative to total purchases in the industry Impact of inputs on cost or differentiation Threat of forward integration relative to threat of backward integration by firms in the industry 2. Determinants of barriers to entry Economies of scale Proprietary product differences Brand identity Switching costs Capital requirements Access to distribution Absolute cost advantages Proprietary learning curve Access to necessary inputs Proprietary, low-cost product design Government policy Expected retaliation 5. Rivalry determinants Industry growth Excess capacity Product differences Brand identity Switching costs Concentration and balance Informational complexity Diversity of competitors Corporate stakes Exit barriers 3. Determinants of buying power Bargaining leverage Buyer concentration vs. firm concentration Buyer volume Buyer switching costs relative to firm switching costs Buyer information Ability to backward integrate Substitute products Price sensitivity Price/total purchases Product differences Brand identity Impact on quality perception Buyer profits 4. Determinants of substitution threat...
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BMGT 495 industry analysis spring 2011 - Copyright 2009...

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