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Dhana Rizky Ramadhan_120310190051_Week 4
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A mind map about Dhana Rizky Ramadhan_120310190051_Week 4.
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Outline
Environmental Scanning and Industry Analysis
External Environmental Variables
Natural environment
Physical resources, wildlife, and climate that are an inherent part of existence on Earth
Societal environment
Definition
Humankind’s social system
Factors
Sociocultural
Current Sociocultural Trends
Increasing environmental awareness
Growing health consciousness
Expanding seniors market
Impact of millennials
Declining mass market
Changing pace and location of life
Changing household composition
Increasing diversity of workforce and markets
Sub Topic
Technological
Technological Breakthroughs
Portable information devices and electronic networking
Alternative energy sources
Precision farming
Virtual personal assistants
Genetically altered organisms
Smart, mobile robots
Economic
Ecological
Political-Legal
Task environment
Those elements or groups that directly affect a corporation and, in turn, are affected by it
Example
Government
Local communities
Supplier
Competitors
Customer
Creditors
Industry analysis
An in-depth examination of key factors within a corporation’s task environment
Industry Evolution
Fragmented industry
No firm has a large market share and each firm
only serves a small piece of the total market in competition with other firms
Consolidated industry
Domination by a few large firms, each struggles to differentiate products from its competition
Multi-domestic industries
Specific to each country or group of countries
Global Industries
Operate worldwide with multinational
companies
Regional industries
Multinational companies primarily coordinate
their activities within regions
Forecasting Techinques
Extrapolation
Brainstorming
Expert opinion
Delphi technique
Statistical modeling
Prediction markets
Cross-impact analysis (CIA)
Profit Potential of Industry
1. Leverage of suppliers
2. Superior or lower-cost substitute product
3. Competition among existing companies
4. Openness to new competitors
5. Buyer's influence
Market Stability
Threatened by
Short product life cycles
Short product design cycles
New technologies
Frequent entry by unexpected outsiders
Repositioning by incumbents
Tactical redefinitions of market boundaries as
diverse industries merge
Strategic Groups
Definition
A set of business units or firms that pursue similar strategies with similar resources
Types
Defenders
Prospectors
Analyzers
Reactors
Competitive Intelligence
Definition
A formal program of gathering information on a
company’s competitors
Sources
Information brokers
Internet
Industrial espionage
Investigatory services
Porter Analysis
Threat of New Entrants
Definition
The ability of new companies to enter into an industry.
Entry barrier
An obstruction that makes it difficult for a company to enter an industry
Example
Economies of scale
Product differentiation
Capital requirements
Switching costs
Access to distribution channels
Cost disadvantages independent of size
Government policies
Rivalry Among Existing Firms
Definition
A competitive move by one firm can be expected to have a noticeable effect on its competitors and thus may cause retaliation.
Factors
Number of competitors
Rate of industry growth
Product or service characteristics
Amount of fixed costs
Capacity
Height of exit barriers
Diversity of rivals
The Bargaining Power of Buyers
Definition
The pressure that customers/consumers can put on businesses to get them to provide higher quality products
Example
Large purchases
Backward integration
Alternative suppliers
Low cost to change suppliers
Product represents a high percentage of buyer’s cost: Incented to shop around
Buyer earns low profits: Cost/service sensitive
Product is unimportant to buyer
The Bargaining Power of Suppliers
Definition
The supplier's power depended on
Industry is dominated by a few companies
Unique product or service
Unique product or service
Substitutes are not readily available
Ability to forward integrate
Unimportance of product or service to the industry
Threat of Substitute Products or Services
The identification of possible substitute products means searching for products that can perform the same function, even though they have a different appearance.
Relative Power of Other Stakeholders
Government
Government
Creditors
Trade associations
Special-interest groups
Unions
Shareholders
Complementors
