4.Product analysis.ppt

7/24/2019 4.Product analysis.ppt

1/30

Product analysis:category/competitor/customer/d

emandJ.Chandra Mohan


2/30

Industry Analysis-

Category Industry background Potential growth

Competitive pressures


3/30

Porter's Five Forces

Describe with low, moderate or high. Industrycompetitiveness can be broken down into

current and potential competitive forces.

hreat of entry

Intensity of rivalry

!ubstitute products

"argaining power of buyers "argaining power of suppliers


4/30

The threat of entry.

#conomies of scale e.g. the benefits associated with bulkpurchasing.

he high or low cost of entry e.g. how much will it cost for thelatest technology$

#ase of access to distribution channels e.g. Do our competitors

have the distribution channels sewn up$ Cost advantages not related to the si%e of the company e.g.

personal contacts or knowledge that larger companies do notown or learning curve effects.

&ill competitors retaliate$

'overnment action e.g. will new laws be introduced that willweaken our competitive position$ (ow important is differentiation$ e.g. he Champagne brand

cannot be copied. his desensiti%es the influence of theenvironment.


5/30

The power of buyers.

his is high where there a few, large players

in a market e.g. the large grocery chains.

If there are a large number of

undifferentiated, small suppliers e.g. small

farming businesses supplying the large

grocery chains.

he cost of switching between suppliers islow e.g. from one fleet supplier of trucks to

another.


6/30

The power of suppliers.

he power of suppliers tends to be a reversal of thepower of buyers.

&here the switching costs are high e.g. !witchingfrom one software supplier to another.

Power is high where the brand is powerful e.g.Cadillac, Pi%%a (ut, Microsoft.

here is a possibility of the supplier integratingforward e.g. "rewers buying bars.

Customers are fragmented )not in clusters* so thatthey have little bargaining power e.g. 'as+Petrolstations in remote places.


7/30

The threat of substitutes

&here there is productforproduct

substitution e.g. email for fa- &here there is

substitution of need e.g. better toothpaste

reduces the need for dentists. &here there is generic substitution

)competing for the currency in your pocket*

e.g. ideo suppliers compete with travelcompanies.

&e could always do without e.g. cigarettes.


8/30

Competitive Rivalry

his is most likely to be high where entry is

likely/ there is the threat of substitute

products, and suppliers and buyers in the

market attempt to control. his is why it isalways seen in the center of the diagram.


9/30

Organization Analysis

Mission statement

alues, goals and ob0ectives

1rgani%ational structure

1rgani%ation history

!&1 analysis


10/30

Strengths

Proprietary products

Market leader

2inancial resources

Management depth

!upply chain processes

#conomies of scale


11/30

Weaknesses

"ad reputation

!trategic direction not clear

3o economies of scale

&eakness in marketing, finance...


12/30

Opportunities

3ew markets

3iches

ertical or hori%ontal integration

Increased market growth

Increasing power with suppliers


13/30

Threats

Competitors )foreign, domestic*

4ow barriers of entry

echnology factor

3ew business models )ie Dell*

!ubstitute products

"uyers gaining power


14/30

!enior management strategy

Core competencies, capabilities, assets

Competitive advantage, core competencies,

distinct capabilities


15/30

Problem Analysis

Derive the problem by asking how, what, when, where, why, andwho.

!tate the problem+situation 5nderstand where the problem comes from

People )raining, skills, performance* #6uipment )Capacity, learning curve, age* !upplies+Materials )7uality, timely delivery, correct 6uantities,

damages* 4ocation )Pro-imity to market, pro-imity to suppliers, pro-imity to

labor force* Internal organi%ation )Culture, community involvement* Processes )Design, measurements, layout* #-ternal )!uppliers, climate*


16/30

inan!ial Analysis

Past, present and future financials

"enchmark data of industry

8ctivity, leverage, profitability, li6uidity ratios

Cash 2low


17/30

Pro!ess Analysis

98s Is9 analysis )flowchart*

9!hould "e9 analysis )flow chart*

Metrics

'oals

Constraints

:ecommendations


18/30

Criti!al "u!!ess a!tors

&hat must the company do to be successful

&hat is the competition doing

(ow can the company differentiate itself


19/30

Alternatives

!tatus 6uo

Partnership, 0oint venture

Cost leader, innovator

3iche player

"e careful of straddling the fence


20/30

Re!ommendations

8nalysis of recommendation

3P and breakeven

!ensitivity analysis

Company reaction and risks

Industry )competitors* reaction


21/30

Implementation

Management buyin

imetables

Capital e-penditures

2ollow up


22/30

Produ!t Analysis

Product lifecycle )Intro,'rowth,Maturity ; Decline*

Product )"rand name, 6uality, services, packaging*

Place )3umber of distribution channels, warehouse

locations* Promotion )Marketing budget, promotion channels,

sales force, advertising media used*

Price )supply, demand, price ob0ective, competitive

factors*

Market share


23/30

#o!ation Analysis

Pro-imity to markets &ages a-es 5tilities such as sewers, water, gas and electricity 8ccess to vendors and materials 8ccess to customers 4abor supply Climate City 1rdinances 8ttitudes within the community Incentives from the community 4and available Pro-imity to freeway+railroad+ocean+airport 4ocation tools


24/30

"upply Chain Analysis

Collaboration efforts

1perational costs

Capacity to meet market demands

!upplier Management

#ffective asset utili%ation

#ffective use of outsourcing #ffective use of vertical integration

!trategic locations of facilities


25/30

Supplier Analysis( ost Analysis!

Can a less e-pensive material+component be used while maintaining6uality$

8re the costs reasonable$ Is a standard item in the market a suitable substitute$ Can the weight of the item be reduced$

Can the packaging be redesigned to reduce costs$ 8re the correct costs being allocated to the pro0ect$ (ave the correct activity based costing methods been used$ Is the product over engineered$ Could a lower 6uality product be

substituted$ 8re other suppliers making a comparable product$ &hich costs are necessary$ Could the product be shipped at a lower cost$ &hat type of inventory management strategy does the company have$ &hat are the trends in the industry$


26/30

$egotiation Analysis

Price

ransportation

!ervice

7uality


27/30

Analyzing e-Pro!urement%ene&ts Consolidate supplier base allows a company to work with fewer

suppliers leveraging its ability to aggregate spend.

Improves communication reduces variability in the supply chain.

2ree buyers to work on strategic tasks buyer?@>?higher than purchasing from companies with negotiated contracts.


28/30

Enhanced reporting and auditing tools an e

procurement system will track all costs allowing a

company to determine the spend to each supplier.

Decreased prices

Improve compliance with approved suppliers

increasing bargaining leverage

Better Approval Controls Head count reduction

Better utilization of assets

Increase inventory turnover

Quicer ramp up for new employees

!aster response times


29/30

Contingen!y Planning

3atural disasters )earth6uakes, floods, hurricanes,disease...*

Civil unrest )riots, fire, political...*

4ogistical accidents )highway closures, trainderailment, container lost at sea...* International problems )#conomic issues, trade

embargoes, politics, war...*

4abor issues )strikes, walkouts...* Changes in supply and+or demand Power outages, fire


30/30

Ris' Assessment

Do strategic products have back up suppliers

in case of capacity restraints$

Is there a "usiness Continuity Plan in case of

natural disaster so that the company cancontinue operations elsewhere.

Documents

4.Product analysis.ppt