战略分析工具分析方法rosrms2.pptxVIP

ROS/RMS Author: Gisele GarrawayMarch 1998AgendaROS/RMS overviewApplicationsROS/RMS stepsClient exampleswireless infrastructuredrug retailingChallengesKey takeaways AgendaROS/RMS overviewApplicationsROS/RMS stepsClient exampleswireless infrastructuredrug retailingChallengesKey takeaways ROS/RMS GraphROS/RMS is a diagnostic tool used to compare a business unit’s actual profitability to its potential profitability.30%$150MMRevenue25%20%CabotNormative band(Predicted potential profitability)Profitability 15%10%CurrierEliot5%Dunster0%125Relative Market ShareROS/RMS ComponentsThere are three main components of an ROS/RMS graph: profitability, relative market share and the normative band.Profitability (y-axis)RMS (x-axis)Normative bandWhat is measured:Current profitability Accumulated experience and strategic position Range of predicted profitabilityHow it is measured?return on capital employed return on equityreturn on assets return on sales*Relative market share (RMS) Plus and minus one standard deviation from regression lineScale:LinearLogarithmic**-------* This tool is typically called ROS/RMS since ROS is the most common profitability measure used**Allows for easy viewing of a doubling in relative market share ProfitabilityCost per unitRMSAccumulated ExperienceAccumulated ExperienceRMSROS/RMS RelationshipCompanies with higher relative market share tend to have more accumulated experience. Higher accumulated experience gives the potential for lower costs and higher profitability.Higher accumulated experience is positively correlated with RMSHigher accumulated experience provides an opportunity for lower costs and higher profitsRMS is a proxy for accumulated experience. RMS is positively correlated with profitability Importance of Market ShareUsing relative market share as a predictor of profitability is supported by empirical evidence. The PIMS database demonstrates that, on average, across industries, companies with greater market share have higher pro