财务报表分析STATEMENT ANALYSIS课件PPT 2 BUSINESS STRATEGY ANALYSIS.pptVIP

STATEMENT ANALYSIS BUSINESS STRATEGY ANALYSIS SEMINAR 3 CHAPTER2 INTRODUCTION There are three aspects to strategy analysis: Industry analysis Understanding the characteristics of the industr(ies)y in which the company mainly operates Competitive strategy analysis The manner in which a company intends to compete with rivals in its industr(ies)y Corporate strategy analysis How the company has positioned itself for success in its industr(ies)y INDUSTRY ANALYSIS There are significant differences in profitability across different industries Where perfect competition exists companies will earn profits that are not much greater than marginal cost In monopolistic conditions super-normal profits are the expectation We need to understand what shapes the economics of an industry before commencing any further analysis of a company We use Porter’s Five Forces as an aid to our analysis Refer Figure 2-1, 2 INDUSTRY ANALYSIS Competitive Force 1 – Rivalry Among Existing Firms Industry growth rate: In growing industries companies do not have to grab market share from rivals as is the case in mature industries Concentration and balance of competitors Degree of concentration in an industry is dependent on the number and size of companies in the industry Competition is fiercest if there are numerous competitors without any one company dominating the industry Degree of differentiation and switching costs If companies offer products that are similar then pricing will determine where a customer shops Switching costs are the costs to a customer of doing business with a new supplier: example: switching to another bank is usually associated with very high switching costs – refer the abnormal profits of the banking industry in Australia INDUSTRY ANALYSIS Fixed vs variable costs and economies of scale Unused capacity results in companies aggressively trying to grab market share to benefit from greater output without increased costs Relationship between fixed and variable costs to volume Exc