Ivy Case Method

8/3/2019 Ivy Case Method

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Ivy Method


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Entering a new market

Marketfavorable for

entry?

Competition

Market share

Comparativeproducts and

services

Barriers to entry

If favorable, howto enter?

Start fromscratch

Acquire existingplayer

Joint venture

with existingplayer


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Industry Analysis

Current industrystructure

Life cycle?

Growth

Transition

MaturityPerformance,

margins

Competition

Major players

Market share

Industry changes

New players

New technology

Drivers

Brand

Technology

Size

Suppliers

How many?

Productavailability

Whats going on

in their market?

Future

Expanding orshrinking?

Mergers andacquisitions

Barriers to

entry or exit?


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Mergers and Acquisitions

Objectives

Increase marketshare

Diversifyholdings

Pre-empt thecompetition

Tax advantages

Incorporatesynergies

Increaseshareholder

value

Price

Fair? Affordable?

How to pay?

If the companysours?

Due Dilligence

What shape isthe company in?

The industry?

How secure areits markets and

customers?

What are themargins?

Competitiveresponse toacquisition

Legal issues

Exit strategies

How long to keepit?

Divest parts of

the organization?


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New Product

Product

Special or

proprietary?

Financing?

Patented?

Substitutions?

Advantages anddisadvantages

Place in productline

Cannibalizing ourown products

Replacingexisting product

Market Strategy

Expandingcustomer base

Promptingcompetitive

response

Barriers to entry

Major playersand market share

Customers

Who?

How to reachthem?

Retention - howto hold them?

Financing

How funded?

Best allocation offunds?

Debt viable?


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Pricing Strategies

Pricing

Value basedpricing

Competitivepricing

Cost-based

pricingPrice-based

costing

KEEP IN MIND

1. Price discrimination (1st/2nd/3rd degree)

2. Bundling

3. Competitors reactions

4. Behavioral Economics Anchoring, Prospect theory


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Growth Strategies

Assessment

Is the industrygrowing?

How are wegrowing compared

to the industry?

Prices relative tocompetitors

Competitorsmarketing anddevelopment

Which segmentshave the most

potential?

Funding for highergrowth

Strategies

Increasedistribution

channels

Increase productline

Invest in majormarketingcampaign

Diversity ofproducts or

services offerd


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New Business

Market

Who is thecompetition and

their market share?

Productscomparison

Barriers to entry

Cost BenefitAnalysis

Management

Marketing andstrategic plan

Distributionchannels

Product

Customers

Finance


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Competitive Response

Why?

New Product?

Competitor'sstrategy changed?

Other competitor'sincreased market

share

Strategy

Acquire acompetitor

Merge with

competitor

Copy competitor

Hire thecompetitor'smanagement

Increase profilewith marketing

campaign


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Increasing Sales

Assessment (increasingsales doesn't necessarilymean increasing profits)

Growth relative tomarket share

Changes in market share

Customer polls

Prices competitive?

Competitor's strategies(marketing and product

development)

How?

Increase volume

Increase amountof each sale

Increase prices

Create seasonalbalance


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Reducing Costs

Assessment

Get costbreakdown

Investigate forirregularities

Benchmarkcompetitors

Labor-savingtechnologies

Cost analysis InternalUnion wages, suppliers,materials, economies ofscale, increased support

system

Cost analysis - External

Economy, interest rates,government regulations,

transportation/shippingstrikes


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Increasing Profits

Revenue ;

E (P=R-C) M ;Always look at

externalfactors first

Indentify revenuestreams

Percentage oftotal revenue of

each

Unusual balance?

Have percentages

changed?

Volume

Expand into new

areas

Increase sales(volume and

force)

Increasemarketing

Reduce prices

Improve customerservice

Costs

ID fixed costs

ID variable costs

Shifts in costs

Unusual costs?

Benchmarkcompetitors

Reduce costswithout damagingrevenue streams


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Turnaround

Strategy

Learn aboutcompany

Review services,products,finances

Secure funding

Review talentand culture

Strategy (con.)

Determine shortterm/long term goals

Business plan

Reassure clients,suppliers, distributors

Prioritize goals anddevelop some small

successes formomentum


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Factors to analyze competitors:

- Market share

- Relative strengths in Product categories, price, features, quality

- Substitutability

PROs CONs

Customer

Company Resources

Competition

Product

etc

Useful generic framework for yes/no cases

Ex. Should Trevor Toys spend more on Low-tech toys?

Ivy Case Method

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