Rivalry is more intense esp when switching costs are low and differentiation is

Rivalry is more intense esp when switching costs are

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-Rivalry is more intense (esp. when switching costs are low and differentiation is minimized) -Only good for those competitors that know how to use digital very well -Also hard because of bots or infomediaries that search the web for the best prices Caveats to External Analysis: 1. Managers must not always avoid low-profit industries - they can still yield high returns for some players 2. Five forces assumes a zero-sum game - can overlook benefits of developing win-win situations 3. Five forces analysis has been criticized for being a static analysis - but environment is constantly changing Complements Products or services that have an impact on the firm's products or services *Considered the single most important contribution of value net analysis 2 Root Causes of Profitability 1. Choosing the appropriate time frame 2. Rigorous quantification of the five forces Strategic Groups Clusters of firms that share similar strategies *The intensity of competition within strategic groups is much more intense than competition across groups 4 Benefits of Strategic Grouping 1. Help a firm identify mobility barriers that protect group from attacks by other groups 2. Helps a firm to identify groups whose competitive position may be marginal or tenuous 3. Helps chart the future directions of firms' strategies 4. Helps think through the implications of each industry trend for strategic groups as a whole
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10/15/2018 BA 405 Exam 1 Flashcards | Quizlet 7/11 Value of Strategic Maps Maps are useful in identifying which industry members are close rivals and which are distant rivals CHAPTER 3 ASSESSING THE INTERNAL ENVIRONMENT OF THE FIRM Limitations of SWOT Analysis 1. Strengths may not lead to an advantage 2. SWOTs focus on the external environment is too narrow 3. SWOT gives a one-shot view of a moving target 4. SWOT overemphasizes a single dimension of strategy 4 Factors of Internal Analysis 1. Value Chain 2. Resources 3. Financial 4. Balanced Score Card Value-Chain Analysis A strategic analysis of an organization that uses value-creating activities Value The amount that buyers are willing to pay for what a firm provides for them *A firm is profitable to the extent that the value that it receives exceeds the total costs involved in creating the product or service Primary Activities Sequential activities of the value chain that refer to the physical creation of the product or service, its sale and transfer to the buyer, and its service after sale *Inbound logistics, operations, outbound logistics, marketing and sales, and service Inbound Logistics Associated with the receiving, storing, and distributing of inputs to the product Includes: material handling, warehousing, inventory control, vehicle scheduling, and returns to suppliers Operations All activities associated with transforming inputs into the final product form Includes: machining, assembly, testing, printing, and facility operations Outbound Logistics
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