Awareness of Competitive Forces Can Help A
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Transcript of Awareness of Competitive Forces Can Help A
8/14/2019 Awareness of Competitive Forces Can Help A
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Two Key Questions
1. How structurally attractive is
the industry?
2. What is the company’s relative
position within the industry?
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Key Industry Analysis Factors
• Collecting a great deal of data.
• Determining which data is crucial.
• Selecting an appropriate overall approach.
• Deciding on the logical starting point.
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Basic Objectives of the SBU
1. To create effective links with
buyers and suppliers.
2. To build barriers to new entrants
and substitute products.
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Porter Competitive Model
Intra-Industry RivalryStrategic Business Unit
Bargaining
Power of Buyers
BargainingPower
of Suppliers
Substitute
Products
and Services
PotentialNew
Entrants
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Competitive Strategy
• What is driving competition in my current or
future industry?
• What are my current or future competitors
likely to do and how will we respond?
• How can we best posture ourselves to achieve
and sustain a competitive advantage?
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Strategy Options
According to Michael Porter
Primary Strategies
1. Differentiation
2. Least Cost
Supporting Strategies
1. Innovation2. Growth
3. Alliance
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Can Information Systems:
1. Build barriers to prevent a company from entering
an industry?
2. Build in costs that would make it difficult for a
customer to switch to another supplier?3. Change the basis for competition within the
industry?
4. Change the balance of power in the relationship
that a company has with customers or suppliers?
5. Provide the basis for new products and services,
new markets or other new business opportunities?
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Porter Competitive Model
Intra-Industry RivalryLarge Retailers
BargainingPower of Buyers
BargainingPower
of Suppliers
Substitute
Products
and Services
Potential
NewEntrants
• Consumers in Small Towns .
• Consumers in Metro Areas
• Foreign Consumers
• Mail Order
• Home Shopping Network
• Electronic Shopping
• Product Manufacturers
• Foreign Manufacturers
• Local Governments
• Foreign General Merchandisers or
Discounters
• Established Retailer Shifting Strategyto Discounting or Megastores
• Telemarketing
• Buying Clubs
• Door-to-door Sales
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Porter Competitive Model
Education Industry
Intra-Industry RivalryStrategic Business Unit
Bargaining
Power of Buyers
BargainingPower
of Suppliers
Substitute
Products
and Services
Potential
New Entrants
• Faculty
• Staff
• Equipment andService Suppliers
• Alumni
• Foundations
• Business
• Government
• Books and Videotapes
• Computer-Based Training
• Training Companies
• Consulting Firms
• Students
• Parents
• Business• Employers
• Legislators
• Foreign Universities
• Distance Learning
• Motorola U.
• National Technical Universities
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Manufacturing IndustryValue Chain
Research and
DevelopmentEngineering
Production
and
Manufacturing
Marketing ServiceSales and
Distribution
Product and Service Flow
Administrative and Other Indirect Value Added
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Generic Value Chain
INBOUND
LOGISTICSOPERATIONS OUTBOUND
LOGISTICS
MARKETING
AND SALESSERVICE
PRIMARY ACTIVITIES
PROCUREMENT
TECHNOLOGY DEVELOPMENT
HUMAN RESOURCE MANAGEMENT
FIRM INFRASTRUCTURE
S U P P O R T A C T I V I T I E
S
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Property and Casualty Industry Value Chain
INBOUND
LOGISTICS
OPERATIONS OUTBOUND
LOGISTICS
MARKETING
AND SALES
SERVICE
PROCUREMENT
TECHNOLOGY
DEVELOPMENT
HUMAN
RESOURCE
MANAGEMENT
FIRM
INFRASTRUCTURE -Financial Policy -Regulatory Compliance - Legal - Accounting
Actuary
Training
Agent
Training
Claims
Training
Claims
Procedures
•Claims Settlement
•Loss Control
•Policy Sales
•Policy Renewal
•Agent Manage-
ment
•Advertising
•Independent
Agent Network
•Billing and
Collections
• Underwriting
• Investment
•Policy Rating
Actuarial Methods
Investment
Practices
I/T
Communications
Product
Development
Market Research
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Technologies in the Value Chain
INBOUND
LOGISTICS
OPERATIONS OUTBOUND
LOGISTICS
MARKETING
AND SALES
SERVICE
PROCUREMENT
TECHNOLOGY
DEVELOPMENT
HUMAN
RESOURCE
MANAGEMENT
FIRM
INFRASTRUCTURE
Information System Technology
Planning and Budgeting TechnologyOffice Technology
Training Technology
Motivation Research
Information Technology
Product Technology
Computer-Aided Design
Pilot Plant Technology
•Diagnostic and
Testing Technology
•Communications
Technology
•Information
Technology
•Transportation
Technology
•Material Handling
Technology
•Storage and
Preservation
Technology
•Communication
SystemTechnology
•Testing Technology
•Information
Technology
Information Systems Technology
Communication System Technology
Transportation System Technology
Software Development Tools
Information Systems Technology
•Basic Process
Technology
•Materials
Technology
•Machine Tools
Technology
•Materials Handling
Technology
•PackagingTechnology
•Testing Technology
•I/nformation Tech.
•Transportation
Technology
•Material Handling
Technology
•Packaging
Technology
•Communications
Technology
•InformationTechnology
•Multi-Media
Technology
•Communication
Technology
•Information
Technology