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WK6 environmental scanning

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  • Sociocultural: consumer activism, lifestyle changes’Technology: r&d green productLegal: environmental protection
  • Appropriate>3.5Unsure2.5-3.5 ethical decision: do the same to you?Not appropriate <2.5Utility: satisfaction of all stakeholder, Rights: respect the rights of the individual involved?,

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  • 1. WK6 Agenda
    News, ASEAN MNEs
    Video clips discovery
    BBA Strategic audit
    Homework
    1
    MIB, BBA 2010
  • 2. Video Clips Discovery
    What are forces of the changes in the first two video clips?
    What’s the trend? What’s the industry situation? Thailand?
    MIB, BBA 2010
    2
  • 3. Video Clips Discovery
    What are their core competencies?
    How do these companies make money?
    Do these companies have a complete vertical integration?
    Do these companies have a sustainable advantage?
    Durability
    Imitability(transparency, transferability, replicability)
    Other meanings for sustainable?
    MIB, BBA 2010
    3
  • 4. Environmental Scanning
    In three groups, use the strategic audit sheets(part I-V) to provide a SWOT analysis for BBA programs in three different universities.
    What are the key success factors?
    How do we make money?
    MIB, BBA 2010
    4
  • 5. Homework
    Select Thai MNEsand do the internet research using the strategic audit sheet to provide a summary
    Current Situation(performance, mission, vision, strategy)
    Board and management
    External environment scanning
    Internal environment scanning
    Core competency
    Competitive advantage
    Provide SWOT using EFAS, IFAS
    MIB, BBA 2010
    5
  • 6. WK6.2 Agenda
    NEWS, ASEAN MNEs
    Lecture
    Mind map
    BBA SWOT
    Homework
    MIB, BBA 2010
    6
  • 7. Strategy
    Strategic management:
    A set of managerial decision and actions that determines the long run performance of a corporation.
    Strategy:
    A master plan to achieve your mission and objective.
    MIB, BBA 2010
    7
  • 8. Strategic Decision Making Process
    See the strategic checklist sheet
    MIB, BBA 2010
    8
  • 9. Strategy and Structure
    MIB, BBA 2010
    9
  • 10. Strategy and Structure
    MIB, BBA 2010
    10
    Strategic Planning
    • International strategy
    • 11. Corporate level strategy
    • 12. Business level strategy
    • 13. Department level strategy
  • Societal Environment
    MIB, BBA 2010
    11
  • 14. Current Trends
    US Current Trends
    • Increasing environmental awareness
    • 15. Growing health consciousness
    • 16. Expanding seniors market
    • 17. Impact of the Generation Y boomlet
    • 18. Declining mass market
    • 19. Changing pace and location of life
    • 20. Changing household composition
    • 21. Increasing diversity of workforce & market
    Thailand trends
    Environment
    Health
    Politic
    Society
    MIB, BBA 2010
    12
  • 22. Industry Environment
    How will the societal environment affect the industry environment?
    MIB, BBA 2010
    13
  • 23. I. Porter’s Five Forces
    Threat of New Entrants
    Barriers to entry
    • Economies of scale: need larger scale for new entrants, SCG, TPI
    • 24. Product differentiation: if no difference should invest in marketing
    • 25. Capital requirements: stock market
    • 26. Switching costs: difficulty in switching the product, Window
    • 27. Access to distribution channels: existing firms are better
    • 28. Cost disadvantages for new entrants: existing firms have advantages on patent, learning curve, raw material, and location.
    • 29. Government policy: limited by licensing in some industries (banking, fisheries)
    MIB, BBA 2010
    14
  • 30. I. Porter’s Five Forces
    Rivalry Among Existing Firms
    • Number of competitors
    • 31. Rate of industry growth: bigger pie with higher growth
    • 32. Product or service characteristics: price war for commodity products
    • 33. Amount of fixed costs and exit costs: high competition in high fixed and exit costs, pharmaceutical industry
    • 34. Capacity: excess supply if full capacity, oil, egg
    • 35. Diversity of rivals
    MIB, BBA 2010
    15
  • 36. I. Porter’s Five Forces
    • Threat of Substitute Products or Services
    • 37. Bargaining Power of Buyers
    • 38. Bargaining Power of Suppliers
    • 39. Relative Power of Other Stakeholders
    MIB, BBA 2010
    16
  • 40. I. Porter’s Five Forces
    • Threat of Substitute: different appearance and characteristics but can satisfy the same need
    • 41. Price ceiling of a product is the switching price to a substitute product.
    • 42. Bargaining Power of Buyers: large buyers, many alternative suppliers, backward integration capability, low switching cost, low profit margin, unimportance to final product
    • 43. Bargaining Power of Suppliers: Oligopoly, high switching cost, no substitute, forward integration capability
    • 44. Relative Power of Other Stakeholders
    MIB, BBA 2010
    17
  • 45. II. Industry Life Cycle
    What would happen in each phase?
    Number of the companies
    Size of the companies
    Strategy
    Price
    MIB, BBA 2010
    18
    Fragmented
    Consolidated
  • 46. III. Strategic Groups and Types
    A strategic groups
    Similar strategies
    Similar resources
    Strategic types
    Defender: limited product lines and cost, focus on improving efficiency
    Prospectors: broad product lines, focus on product innovation and market opportunities
    Analyzers: operate in many market areas (stable: efficiency and variable: innovation)
    Reactors: inconsistent in strategy-structure-culture relationship
    Who’s the direct competitor?
    MIB, BBA 2010
    19
  • 47. Strategic Factors
    Apply to BBA
    MIB, BBA 2010
    20
  • 48. EFAS and Industry Matrix
    Your external analysis and position in the industry. How your competitors respond to each factor.
    MIB, BBA 2010
    21
  • 49. Mind map and BBA Exercise
    Prepare the mind map for this lecture.
    Continue BBA Exercise
    Strategic factors
    Use the word “BECAUSE” to provide your supporting reasons.
    Example: BBA students are…because…
    MIB, BBA 2010
    22
  • 50. Homework
    What industry that you choose?
    MNEs?
    EFAS and Industry Matrix
    Continue lecture for internal factor
    MIB, BBA 2010
    23
  • 51. WK6.3 Agenda
    News: World Cup(Spain), 3G, new director for BOT, ladies’ journey, Carrefour, Princess speech
    ASEAN MNEs
    Competitive Intelligence exercise
    Lecture
    Mind map, BBA exercise, Homework update
    MIB, BBA 2010
    24
  • 52. Competitive Intelligence Exercise
    Careful study of trade journals.
    Wiretapping the telephones of competitors.
    Posing as a potential customer to competitors.
    Getting loyal customers to put out a phony "request for proposal” soliciting competitors' bids.
    Buying competitors' products and taking them apart.
    Hiring management consultants who have worked for competitors.
    Rewarding competitors' employees for useful "tips."
    Questioning competitors' customers and/or suppliers.
    Buying and analyzing competitors' garbage.
    Advertising and interviewing for non-existent jobs.
    Taking public tours of competitors' facilities.
    Releasing false information about the company in order to confuse competitors.
    Questioning competitors' technical people at trade shows and conferences.
    Hiring key people away from competitors.
    Analyzing competitors' labor union contracts.
    Having employees date persons who work for competitors.
    Studying aerial photographs of competitors' facilities.
    MIB, BBA 2010
    25
  • 53. Internal Scanning
    MIB, BBA 2010
    26
  • 54. I.Resource Based Approach
    Resources+capability+competencycompetitive advantage
    Resources:
    Tangible:
    Physical assets: plant, equipment, and location
    Capital: credit rating, capital management
    Technology: patent, R&D
    Intangible: employees and skills, culture, reputation, brand
    Capabilities: ability to use its resources, ability to turn input into output
    Competency: cross functional integration and coordination of capabilities, use VRIO framework to evaluate its competency
    Avon: door to door selling
    Wal-Mart: logistic
    Oriental Hotel: customer service
    MIB, BBA 2010
    27
  • 55. I.ResourceBased Approach
    VRIO Framework
    MIB, BBA 2010
    28
  • 56. Resource Based Approach to Strategy Analysis
    Resources+capability+competencycompetitive advantage
    Match capability with resourceor resource with capability
    Which way is easier?
    MIB, BBA 2010
    29
  • 57. Sustainable Competitive Advantage
    Durability: depreciation rate of the firm’s resources, capabilities, or core competencies
    Examples: Intel, cassette tapecdmp3mp4
    Imitability: duplication rate by others
    Transparency:understanding speed of other firms to the relationship of resources and capabilities supporting a successful firm’s strategy
    Transferability:competitors ability to get the resources and capabilities necessary for the competitive challenge
    Replicability: competitors duplication ability, the use of resources and capabilities to imitate the firm’s success
    Explicit knowledge vs. Implicit knowledge Which one is easier to copy?
    MIB, BBA 2010
    30
  • 58. II. Business Models
    6. Time Model: SONY R&D 1st mover
    7. Efficiency Model: Wal-Mart, Dell
    8. Blockbuster Model: movies, pharmaceutical companies
    9. Profit Multiplier Model: Walt Disney
    10. Entrepreneurial Model: niche market
    11. De Facto Standard Model: free for basic product
    How can we use business model for our internal scanning?
    Do your competitors use the same business model?
    How do these companies make money in each business model?
    Customer Solutions Model: IBM, consulting firms
    Profit Pyramid Model: GM
    Multi-Component System/Installed Base Model: HP printer and ink cartridge, Gillette razor and blade
    Advertising Model: news paper, dot.com
    Switchboard Model: ebay, NY material museum
    MIB, BBA 2010
    31
  • 59. III. Value Chain Analysis
    Value chain:
    Linked set of value-creating activities beginning with basic raw material and ending with distributors getting final goods into hands of customers
    MIB, BBA 2010
    32
  • 60. III. Value Chain Analysis
    The importance or weight of each activity(strength and weakness) depends on the type of business.
    Retail business: logistic, Pharmaceutical or electronic: R&D
    How can we use value chain for our internal scanning?
    Compare your value chain to the industry key success factors as well as your competitors value chain.
    Examine the company product lines for strength& weakness (divisional structure). Synergies among product lines (economies of scope)?
    MIB, BBA 2010
    33
  • 61. Organizational Structure
    Examine the organizational structure before the value chain to see the availability of resources and capabilities (reverse, 2nd school of thought).
    How will the organizational structures be your strengths or weakness?
    Specialization, control, command, decision, communication flow
    MIB, BBA 2010
    34
  • 62. Other Internal Issues
    Corporate culture: identity, commitment, stability, and employee behavior
    Marketing: positioning, segmentation, product life cycle, marketing mix, brand
    Financial: financial leverage, capital budgeting
    R&D: R&D intensity(% R&D spending),patent, publication, new product, technology transfer, technology discontinuity
    HR: teams, temporary workers, quality of life and diversity
    MIB, BBA 2010
    35
  • 63. Mind Map & BBA Exercise
    How to do the internal scanning?
    How can we apply sufficiency economy philosophy with internal scanning?
    IFAS textbook example
    MIB, BBA 2010
    36
  • 64. Homework
    Industry? Annual Reports? News?
    SWOT analysis on Wednesday July 14, 2010
    Each team will have to evaluate other teams’ results.
    MIB, BBA 2010
    37