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PRUEBA
STRATEGY TOOLS-A PERSPECTIVE
Team Prueba
PORTERS FIVE FORCES MODEL
Useful to find the attractiveness of the market
or profitability
All the parameters can be mapped
A viable business model can be developed
PORTERS FIVE FORCES MODEL
TELECOM INDUSTRY ANALYSIS
New Entrants Medium
--Wireless Spectrum-main entry
barrier
--Huge Capex; long breakdown period
--Mobile Virtual Network Operators
--Voice over Internet Protocol players
Supplier Power-Medium
--Network Equipment & Tower
companies have low bargaining
power
--Content & handset providers
has high bargaining power
Buyer Power-High
--Customers has many options
--Low switching cost
--Strong trend towards prepaid
--High churn rate
Substitutes-High
--VOIP & Instant Messaging over
mobile
--Alternate technology over WIMAX
--Broadband & VOIP services from
other players
Rivalry-High
--New products/Services are
replicable easily
--Difficult to differentiate
--Fierce price war
BCG MATRIX
Its a portfolio
management tool used
in Product Lifecycle.
Y axis= Market Growth
Rate
X axis= Relative Market
Share (wrt the Largest
Competitor) >0
BCG MATRIX
Stars= (High Growth, High Market
Share)Leaders in their segment
Question Marks= (High Growth, Low Market
Share)..Either heavily invest or sell
Cash Cows= (Low Growth, High Market
Share)low promotional expenses, high return
Dogs= (Low Growth, Low Market
Share)Expensive turn around plans, Kill
DISADVANTAGES:
Market share is not the only success factor
Market Growth rate is not the only
attractiveness factor
Model neglects synergy/relationship between
the products
GE MATRIX
GE MATRIX
The aim of a portfolio analysis is to:
1. Analyze its current business portfolio and decide
which SBU's should receive more or less
investment.
2. Develop growth strategies for adding new
products and businesses to the portfolio
3. Decide which businesses or products should no
longer be retained
GE MATRIX
Industry Attractiveness The vertical axis of the GE / McKinsey matrix is industry attractiveness, which is determined by factors such as the following:
Market growth rate
Market size
Demand variability
Industry profitability
Industry rivalry
Global opportunities
GE MATRIX
Business Unit Strength The horizontal axis of the GE / McKinsey matrix is the strength of the business unit. Some factors that can be used to determine business unit strength include:
Market share
Growth in market share
Brand equity
Distribution channel access
Production capacity
Profit margins relative to competitors
GE MATRIX-AN EXAMPLE FACTORS AFFECTING
MARKET ATTRACTIVENESS
WEIGHT
RATING
SIZE
REASONS
Overall Market Size
0.3
4.5
1.35
4.2 Lakh Crore
Annual Market Growth Rate
0.2
3
0.6
21% Growth Rate YOY
Competitive Intensity
0.2
1
0.2
In India, MF industry manages nearly 700 schemes
Major competitors are Reliance Power,Banking funds
and UTI
Market Penetration
0.1
2
0.2
8%
Consumer Awareness
0.2
3
0.6
On average, consumers awareness of the investment
related brands went up from 12.9 brands last year to
18.5 brands
TOTAL 1 2.95
GE MATRIX-AN EXAMPLE
Three Strategies: GROW, HOLD, DIVEST
SWOT ANALYSIS
Strengths
-Unique Product
-Location of your business
-Workers unique skill set
-Quality of your product
Weaknesses
-Location of your business
-Lack of quality & customer service
-Poor marketing & Sales
-Undifferentiated product or services
Opportunities
-A new emerging or developing market
(niche product, place- new country, less
competition)
-Merger, joint venture or strategic alliance
Threats
-New competition in the market, possibly
with new products or services
-Price Wars
-Competitor oligopoly or monopoly
-taxation
S,W- internal factors
O,T- external factors
ANSOFF MATRIX
Can be used at any stage of the Product
Lifecycle
ANSOFF MATRIX
Market penetration- Less Risky (existing resources can be used), But limited opportunity
Market Development- Into newer segments of different geographies; moderately risky
Product Development- Useful when the same customer segment is targeted with better product; moderately risky
Diversification- Highest Risk, but highest return also; Requires both product and market development and the company might venture outside its core competency
7 S MODEL
The Seven S's- is important for normal functioning of the org; and when
there is any Change to be implemented
7 S MODEL
Structure: This is more than just the stated hierarchy of the organization. This is the "in practice" hierarchy, too. Is a business focused on the customer? Is it segmented by function? Is it segmented by geography? Is it top heavy with a lot of decision-making executives?
Systems: This is the process through which the company gathers information and makes decisions. If it's effective, a company can react quickly and appropriately to changes in the marketplace. If a company's systems are not adequate, the company stands the risk of being ponderous.
7 S MODEL
Skills: This is the collective skill set of the organization. If
a company determines to hire only people who can
speak two or more languages, they will quickly fill their
ranks with skilled people who allow them to
communicate to other people more effectively. Some
companies in the early growth stages can react to a
need by hiring too many people in one skill category and
run the risk down the road of having a variety of absent
skills. There is no perfect mix, this is a matter of
constantly balancing and rebalancing based on need.
7 S MODEL
Style: This category is about the culture of the company. Is it aggressive? Is it conservative? Is it innovative? Is everyone happy? Does the company feel bloated and unwieldy? Each company has its own style and that style is set by the leadership and supported (or changed) by the mix of staff hired.
Staff: This category, obviously, deals with the people in the organization. It involves not only their skills (mentioned in another S) but also whether or not there are enough (or too many) staff members to do the job as well as the personal and professional goals that each person has.
7 S MODEL
Superordinate goals (which later was appropriately renamed Shared Values):This category talks about the overarching purpose in the organization more specifically, it deals with the real or practiced values and compares them to the stated values. A company, for example, may claim to be customer-centered but in reality it could reward staff for high volumes of sales, encouraging staff to ignore the customer and focus on making their numbers.
Strategy: Strategy deals with tomorrow- what is the company planning on achieving in the future and what are they doing today to prepare for those goals?
NEW BCG MATRIX
NEW BCG MATRIX
Fragmented Industry
This is a industry characterized by many opportunities to create competitive advantage but beach advantage is small
Results Many small firms each
differentiated in their own way
The industry is fragmented into different niches & segments
Examples Service industries such as
restaurants.
Specialized Industry
This is a industry where there are many opportunities for the firm to create competitive advantage that are huge & give a high payoff
Results Large firms with highly
differentiated products
Example Pharmaceutical Industry
NEW BCG MATRIX
Stalemate Industry
This is a industry that produces commodities & is characterized by few opportunities to create competitive advantage with each advantage being small
Result Limited scope for
differentiation
Price is the predominant competitive weapon
Example Steel making, bulk chemicals
Volume industry
This is the industry characterized by few opportunities to create competitive advantage but each is huge with a large payoff
Result Only the largest can sustain
competitive advantage
Industry leaders are the large, low cost producers
Examples Airlines, Soap Manufacturers
GAP MODEL
GAP 1
Gap 1 is interesting in that it highlights a
problem faced by most service organizations
but one that is not always addressed. It is that
the service provider does not accurately know,
understand or appreciate what their customer
expects
GAP 2
Gap two is the difference between a service
providers' perception of clients / users
expectations and the subsequent development
of customer-driven designs and standards. It is
not enough to simply understand clients /
users perceptions, that knowledge must
translate itself to meaningful service offerings
at an appropriate level or to an appropriate
standard.
GAP 3
This is the gap between the service designs
and standards and actual service delivery. In
other words having guidelines, manuals and
well-communicated standards is not enough to
guarantee excellent service. Resources in the
form of people, systems and appropriate
technology also need to be in place and
adequately monitored.
GAP 4
The final gap exists when there is a difference
between actual service delivery and the
external communications and promises made
by the provider. These can be in the form of
leaflets, web pages, presentations and any
other promotional media. Elevated claims or
promises become the standard for setting
expectations and the standard against which
they will be judged.
PRUEBA
PEST ANALYSIS
The model's factors will vary in
importance to a given company
based on its industry and the
goods it produces
Some analysts added Legal and
rearranged the mnemonic to SLEPT;
inserting Environmental factors
expanded it to PESTEL .
STRATEGIC EARLY WARNING SYSTEM
The ideal SEWS process has three phases: Phase 1 is characterised by the information gathering of weak signals, or trends and issues. The
scanning itself relies primarily on examining various media sources, the technique of content analysis
Phase 2 is one of diagnosis, which is characterized by three steps:
In-depth analysis of the trend or issue, examining the core and the various contexts of this phenomenon. The aim is to gain an impression of the possible potential development of an issue or trend. Stakeholder theory may be used to understand actors in a specific industry
The second step has several objectives:
The attempt should be made to think creatively about how the particular trend or issue could evolve.
The nature of the contexts needs to be examined in order to cluster several trends or issues, thus providing an understanding of the mutual influences on and of trends and issues.
It is important, due to the limited resources in any organization, to identify and select those trends and issues that are particularly relevant.
Phase 3 describes the formulation of an appropriate strategy to react to the trends and issues which have been identified and labelled as relevant.