Five Forces- Industry StructureA few important things about five forcesNot all five forces are equally important E.g.

Government and Proprietary Techn in Telecommn.

Munish Thakur2*ALL ARE NOT EQUAL

Munish Thakur*

Five Forces- Industry StructureA few important things about five forcesIt is a tool for understanding industry structure. Industry structure is affected by five forces instead of just competition.Structural attractiveness is related to long term profitability and strategic decision makingDoing numbers could be one way of analysing industry but it is not sufficientAttractiveness cannot be found through growth in profit and revenues numbers

Munish Thakur2*

Munish Thakur*

Five ForcesA few important things about five forcesIt is a tool for analyzing industry and not companiesPeople dissociate five forces and SWOT analysis. Five Forces captures OT part of SWOT Defining industry is most important part in doing analysisHow to define industry: should not be too broad or too narrowSame Markets (Geographies and Products)Same forcesSensitivity

Munish Thakur2*

Munish Thakur*

Five Forces UsagesDescribing Industry StructureGuessing attractiveness of IndustryStrategies to alter industry structurePosition the firm

IN NUTSHELL

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Describing the structureIdentify key elements of industrys structure: main players, suppliers, buyers, substitutesThis is a difficult task, especially in service industry E.g. Cable, Satellite, Broadcasting; Retail banking or investment banking, credit cards or consumer lending

Hard nut to crack

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Strategies to alter industry structure

Better strategies would lead to altering of industry structureKey structural featureWhich of key structural features are amenable to changeE.g. Arcellor Mittal consolidating steel industryE.g. Hospitals and Doctors and entry barriersIntel consolidating industry with intel inside

Hard nut to crack

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ConcentrationEntry and ExitBarriersProductDifferentiationInformationPerfect CompetitionOligopolyDuopolyMonopolyMany firmsA few firmsTwo firmsOne firmNo barriersSignificant barriersHigh barriersHomogeneousProductPotential for product differentiationPerfectInformation flowImperfect availability of informationIndustry Structure Variations

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Industry analysis: KSFIndustry analysis also helps in finding the key success factors

Munish Thakur2*Can we unlock the mystery?

Munish Thakur

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Identifying Key Success Factors

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Common Types ofKey Success Factors

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