Business Policy Lecture 3

8/10/2019 Business Policy Lecture 3

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School of Economics and Management | Ola Mattisson | FEKH11 Business Policy|

Business Policy

Lecture 3OLA MATTISSON


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Business Policy lecture 3

Industry analysis

Agenda 2 Swedish minutes

Industry analysis

Competitive situation and industry attractiveness

5 forcesa framework for industry analysis

Competitor analysis


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Industry analysis and competitive

strategy

Corporate strategy

What industries do the company participate in? Howto allocate resources?

Business strategy

How to create competitive advantage?


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5/14School of Economics and Management | Ola Mattisson | FEKH11 Business Policy|

Identify relevant features of the

industry

Market size

Market growth rate

Capacity surpluses or shortages

Industry profitability

Entry/exit barriers

Product properties

Rapid technological change

Capital requirementsVertical integration

Economies of scale

Product innovation pace



Overall competition analysis

Porters 5 forces model

Rivalry among competing sellers

Threat of potential entry

Competition from substitutes

Power of suppliers

Power of customers

(Grant, page 65 pp)




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Pre-requisites for

success

What do

customers want?

An alys is of compet it ion

What drives competition?

What aret the main dimensions

of competition?

How intense are competition?

How can we obstain a superior

competitive position?

How does the frm

survive competition?

An alys is of demand

Who are our customers?

What do they want?

Key Success

Factors


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Industry analysis and competitive

strategy

Segmentation

To divide an industry into subsections with differentcharacteristics

Customer segments (ex. geograpy, customer type,distribution)

Product segments (ex. design, size, price)

Strategic groups

the group of firms in an industry following the same orsimilar strategy along the strategic dimensions

Strategic dimensionsdecisive dimensions for strategicdecisions (ex. vertical integration, new markets, product

range)


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Competitor analysis

Why?

Forsee competitors decisions and strategies

Forsee competitors reactions on our initiatives

To evaluate how to direct competitor actions in a directionthat benefits us


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Competitor analysis

How is the firm competing? Today and inthe future?

Investments, R&D and new products, recruitments

Identify competitors current and futuregoals

Identify competitors assumptions about

the industry Industry recipes

Identify competitors resources andcapabilities

Cash, technology, factor costs


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Overall industry attractiveness

Overall summarizing picture

Conclusions about industry attractiveness and potentials


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Documents

Business Policy Lecture 3