Analysis+of+the+Competitive+Environment.ppt

Analysis of the Competitive Environment Chapter 7 Learning Objectives Quick review of analysis of the external macroenvironment Key definitions Understand the significance of industry and market analysis Understand and be able to apply Porter’s 5 Forces model, and understand its limitations Define competitive vs. collaborative behavior in industries Understand and be able to apply the resource-based framework of analysis of the competitive environment Define strategic groups Quick Review Analysis of the external environment includes: Analysis of the macroenvironment (“far” environment) Analysis of the microenvironment (“near” environment, or competitive environment) External Environment Quick Review: Analysis of the Macroenvironment Tool for analysis: SPENT Analysis Socio-demographic Political Economic Natural Environmental Technological Quick Review: Conducting Macroenvironmental Analysis Scanning Monitoring Forecasting Assessing NOTE: The ability to predict trends and changes in the macroenvironment that impact a business, and the ability to make changes based on the prediction, can be a source of competitive advantage Analysis of the Competitive Environment: Key Definitions Macroenvironment Microenvironment Industry Market Switching costs Substitute products Purpose of Analysis of Microenvironment (Industry and Markets) Identify opportunities for competence leveraging Understand customers and their needs Identify current and potential threats Understand resource markets Industry Analysis: Classification Porter: Industry is a group of businesses whose products are close substitutes Other definitions: by production process Examples: SIC (Standard Industrial Classification) and NACE (Nomenclature Generale des Activites Economiques dans les Communautes Europeenes) SIC Examples Link: UK SIC(92) Examples: D Manufacturing DA Manufacture of food products, beverages and tobacco DB Manufacture of textiles DC Manufacture of leather and leather products Example: Industry