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Class 2 Strategy Analysis 6slide

Class 2 Strategy Analysis 6slide - Todays Plan Why strategy...

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1 Business Analysis and Valuation Class 2: Strategy Analysis Today’s Plan Why strategy analysis? Industry analysis Competitive strategy analysis Corporate strategy analysis SWOT analysis A. Why Strategy Analysis Strategy drives the actions of an organization. Studying a firm’s strategy provides: An understanding of what drives risks, profitability, and competitive advantages A basis for future performance to be forecasted An idea of how to measure the success of a firm’s actions B. Industry Analysis To Understand the environment and competitive forces within an industry Regulators Competitors Suppliers and customers Products and industry life cycle A firm’s strategy is heavily influenced by its industry Michael Porter’s “Five Forces” Competitive Strategy Industry Structure and Profitability B1.Rivalry among Existing Firms Competition determines profitability Higher degrees of competition among firms: Push prices towards the marginal cost of production. Make non-price dimensions of products or services more important.
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