ANALYZING THE BUSINESS LANDSCAPE.ppt

ANALYZING THE BUSINESS LANDSCAPE Determining Industry Attractiveness and Identifying Strategic Opportunities Distribution of Industry Returns Profitability Differences Across Selected Industries Critical Steps in Business Landscape Analyses Step 1: Analyze shocks and trends in the macro-environment Step 2: Analyze the nature of market demand and consumer behavior Step 3: Analyze business landscape (industry) - Five competitive forces Framework - Coopetition and Value Net Framework Step 4: Identify critical success factors Step 5: Analyze the intra-industry(strategic group) structure of the industry and identify critical differences between groups Step 6: Evaluate the competitive sustainability/ vulnerability of strategic positions of rivals Components Of The Macro Environment Analyzing Market Demand And Consumer Behavior Identify market segments and the bases for inherent differences among customers buyer characteristics and preferences price sensitivity and cross-price elasticities patterns of use receptivity to marketing etc. Analyze aggregate and market segment growth rates, saturation levels, replacement-purchase rates, etc. Estimate/forecast the “shape” of the demand curve for the industry and each segment, keeping in mind that there is, ex ante, no such thing as an industry life cycle. Distinguish the nature of the products/services. i.e. observable goods, experience goods, communication effect goods Industry Analysis Analyzing the Competitive Structure and Behavior of Industries Porter’s Five Forces Analysis Coopetition and the Value Net Neutralizing The Five Competitive Forces Force Entry Rivalry Substitutes Buyers Suppliers Method for Neutralizing Force Erecting barriers (isolating mechanisms) create exploit economies of scale, aggressive deterrence, design in switching costs, etc. Compete on nonprice dimensions: cost leadership, differentiation, cooperation, etc. Improve attractiveness compared to substitutes: better service, more feature