Download The External Environment for Strategy

The External Environment for
Strategy
Strategic Management
Lecture 2
義守大學企管系四年級B班
2009.09.30
Key Objectives
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Understand how to explain the firm’s
external environment
Describe the general, industrial, and
competition environment
Identify the firm’s five competitive forces
Explain the environmental dimensions
Define the strategic groups
Describe how firms need to know about
their competitors
External Environment
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Three Possible Environmental
Analysis Layers
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General Environments
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Industry Environments
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Dimensions in the broader society that influence
an industry and the firms within it
The set of factors that directly influences a firm
and its competitive actions and competitive
responses
Competitor Environments
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Gather and interpret information about their
competitors
External Environment
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Another Four Environmental Dimensions
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Market Segmentation
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Growth Opportunities
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The possible growth space in the specific productmarket line
Market Channel Modes
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How to segment the possible market, and identify the
possible source of customer
The Possible Channel to Access the Customer
Industrial Life Cycle
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How a industry evolve
Segments of the General
Environments
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Demographic Segment
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Economic Segment
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The Government Policy
Socio-cultural Segment
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Recession, Booming, GNP, GDP, Average Income
Political/ Legal Segment
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Population Size, Age Structure, Geographic Distribution,
Ethnic Mix, Income Distribution
Customer Taste, Degree of Openness, Value
Technological Segment
Global Segment
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Economic or Trade Region
Industry Environment
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Definition of Industry
Importance of Industry Environment
Analysis
Five Forces Model within a Specific Industry
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Threat of New Entrants
Rivalry among Competing Firms
Bargaining Power of Suppliers
Threat of Substitute Products
Bargaining Power of Buyers
Five Forces Model
—Threat of New Entrants
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How to Identify a Competitor?
Possible Threat from New Entrants
High Entry Barrier Increase the Returns
for Existing Firms
How to Prevent the New Entrance?
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Establish Barrier to Entry
Retaliation
Five Forces Model
—Threat of New Entrants
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Possible Sources of Barriers to Entry
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Economic of Scale
Product Differentiation
Capital Requirements
Switching Costs
Access to Distribution Channels
Cost Disadvantages Independent of Scale
Government Policy
Five Forces Model
—Bargaining Power of Suppliers
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Sources of Suppliers’ Bargaining Power
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Fewer
Non-substitute
Non-significant
Critical
Higher Switch Cost
Credible Threat
Possible Methods to Lower the
Bargaining Power of Suppliers
Five Forces Model
—Bargaining Power of Buyers
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Sources of Buyers’ Bargaining Power
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Large Portion
Significant Portion for Annual Revenues
lower Switch Cost
Undifferentiated/ Standardized Products
Possible Methods to Lower the
Bargaining Power of Buyers
Five Forces Model
—Threat of Substitute Products
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Definition of Substitute Products
Possible Source of Substitute Products
Differentiating Products along
Dimensions that Customers Value
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Price
Quality
Service
Location…
Five Forces Model
—Intensity of Rivalry among
Competitors
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Possible Sources of Higher Intensity of
Rivalry
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Numerous or Equally Balanced Competitors
Slow Industry Growth
High Fixed Costs/ High Storage Costs
Lack of Differentiation/ Low Switching Costs
High Strategic Stakes
High Exit Barriers
Competitor Analysis
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Understanding a Competitors from
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Scale, growth, profit
Mission, commitment
Organizational factors
Cost structure
Past strategies
Resources and competencies
How to Response the Competitor’s Action
Market Segmentation
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Importance of Market Segmentation
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Market Diversity
Limited Resources
Monopolistic Advantage
Market Transformation
The Possible Variables for Segmentation
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Customer Characteristics
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Demography, Life Style and Personality, Geography
Product Characteristics
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Interest, Purpose, Brand Identity v.s. Price Sensitivity
Market Segmentation
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The Principle of Market Segmentation
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Market Boundary
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Measurability
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Quantity v.s Quality
Accessibility
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Inside similarity v.s. Outside Dissimilarity
The possible channel to access the customers
Feasibility
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The resource and executive ability of the firms
Market Channel
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The Channel Dimension
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Channel Length
Degree of Spread
The Players in the Channel
The link between Upstream and
Downstream
Typology
Market Channel
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The Influential Factors in Channel
Analysis
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The
The
The
The
The
Market Characteristics
Cost associated with the Channel
Value-added of the Channel
product Characteristics
Competition in the Channel
Industry Life Cycle
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Product Life Cycle Analysis
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According the growth rate of the product’s
sales volume
Introduction stage, growth stage, maturity
stage, decline stage
The Evolution of an industry does not
always follow the S curve
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Industry characteristics, Industrial structure,
The speed of innovation and technological
Change… do matter
Growth Opportunity
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The Possible Driving Force for Growth
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The Quantity and Frequency of the Product
The New Use of the product
The Degree of the Maturity of the Product (可改良空間）
The Potential Segmentation in the Market （尚未被重視）
The Potential Cost Cutting Possibility
Standardization （是否出現標準規格）
The Substituted Product
The Growth and Decline of the Customer
The Demand Trend
Growth Opportunity
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The Risk in Growth or Booming
Market
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Over-Crowded Competition
The Growth Rate is over-predicted
A Powerful and Competitive New Entrant
The Key successful factor is changed
The Resource Limitation
The Channel Limitation
Discussions (I)
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What is the Driver for New Economy
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Globalization
Technological innovation
Internet
Are There the Sixth Force for Analyzing
the Competitive Environment?
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Governmental policy
Culture, value
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Discussions (II)
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How the Concept of Boundary-less
Company may Influence the Competitive
Environment?
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The Nature of competitiveness
The Nature of management
The Possible Inter-organizational
relationships
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Co-option, competing & cooperation,
Strategic alliance
Business group