Chapter 3
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    Chapter 3 Chapter 3 Presentation Transcript

    • INDUSTRY AND COMPETITIVE ANALYSIS CHAPTER -3 Mohammad Mizenur Rahaman Ph.D Researcher Assistant Professor Shahjalal University of Science & Technology, Sylhet Published by
    • Q-1: Categorizing the Objectives and Strategies of Competitors
      • Local
      • Be dominant leader
      • Aggressive expansion via acquisition & internal growth
      • Getting stronger; on the move
      • Mostly offensive
      • Regional
      • Overtake industry leader
      • Well-entrenched
      • Mostly defensive
      • National
      • Be among industry leaders
      • Expansion via internal growth
      • Stuck in the middle of the pack
      • Combination of offensive & defensive
      • Multicountry
      • Move into top 10
      • Expansion via acquisition
      • Going after a different position
      • Aggressive risk-taker
      • Global
      • Move up a notch in rankings
      • Hold on to present share
      • Struggling; losing ground
      • Conservative follower
      • Maintain current position
      • Give up present share to achieve short-term profits
      • Retrenching to a position that can be defended
      • Just survive
      • Striving for low-cost leadership
      • Mostly focusing on a market niche
      • Pursuing differentiation based on
      • Quality
      • Service
      • Technology superiority
      • Breadth of product line
      • Image & reputation
      • More value for the money
      • Other attributes
      Competitive Scope Strategic Intent Market Share Objective Competitive Position Strategic Posture Competitive Strategy
    • Question 2: What Are the Key Factors for Competitive Success?
      • KSFs are competitive elements that most affect every industry member’s ability to prosper in the marketplace
        • Specific strategy elements
        • Product attributes
        • Resources
        • Competencies
        • Competitive capabilities
      • KSFs spell difference between
        • Profit and loss
        • Competitive success or failure
    • Identifying Industry Key Success Factors
      • Answers to three questions pinpoint KSFs
        • On what basis do customers choose between competing brands of sellers?
        • What must a seller do to be competitively successful -- what resources and competitive capabilities does it need?
        • What does it take for sellers to achieve a sustainable competitive advantage?
      • KSFs consist of the 3 - 5 really major determinants of financial and competitive success in an industry
    • Example: KSFs for Apparel Manufacturing Industry
      • Fashion design -- to create buyer appeal
      • Low-cost manufacturing efficiency -- to keep selling prices competitive
    • Example: KSFs for Tin and Aluminum Can Industry
      • Locating plants close to end-use customers -- to keep costs of shipping empty cans low
      • Ability to market plant output within economical shipping distances
    • Strategic Management Principle
      • A sound strategy incorporates efforts to be competent on all industry key success factors and to excel on at least one factor!
    • Question 3: Is the Industry Attractive or Unattractive and Why?
      • Develop conclusions about whether the industry and competitive environment is attractive or unattractive, both near- and long-term, for earning good profits
      Objective Principle A firm uniquely well-suited in an otherwise unattractive industry can, under certain circumstances, still earn unusually good profits
    • Things to Consider in Assessing Industry Attractiveness
      • Industry’s market size and growth potential
      • Whether competitive conditions are conducive to rising/falling industry profitability
      • Will competitive forces become stronger or weaker
      • Whether industry will be favorably or unfavorably impacted by driving forces
      • Potential for entry/exit of major firms
      • Stability/dependability of demand
      • Severity of problems facing industry
      • Degree of risk and uncertainty in industry’s future
    • Conducting an Industry and Competitive Situation Analysis
      • Two things to keep in mind:
        • 1. Evaluating industry and competitive conditions cannot be reduced to a formula-like exercise-- thoughtful analysis is essential
        • 2. Sweeping industry and competitive analyses need to done every 1 to 3 years