PPT 4-3 Dimensions of a Market Analysis Emerging submarkets Actual and potential market and submarket size Market and submarket growth Market and submarket profitability Cost structure Distribution systems Trends and developments Key success factors
Chapter 4 - Market and Submarket Analysis PPT 4-7 Questions to Help Structure a Market Analysis Submarkets Are augmented products, emerging niches, trend toward systems, new applications, repositioned product classes, customer trends, or new technologies creating worthwhile submarkets? How should they be defined? Size and Growth Potentially important submarkets? Size and growth characteristics? Submarkets declining? How fast? Driving forces behind the trends? Figure 4.1
Chapter 4 - Market and Submarket Analysis PPT 4-8 Questions to Help Structure a Market Analysis Profitability How intense is the competition among existing firms? Threats from potential entrants and substitute products? Bargaining power of suppliers and customers? Attractive/profitable markets or submarkets? Cost Structure Major cost and value-added components for various types of competitors? Figure 4.1
Chapter 4 - Market and Submarket Analysis PPT 4-9 Questions to Help Structure a Market Analysis Distribution Systems Alternative channels of distribution? How are they changing? Market Trends Key Success Factors Key success factors, assets, and competencies to compete successfully? Can assets and competencies of competitors be neutralized? Figure 4.1
Chapter 4 - Market and Submarket Analysis PPT 4-23 Detecting Maturity and Decline Price pressure caused by overcapacity and the lack of product differentiation Buyer sophistication and knowledge Substitute products or technologies Saturation No growth sources Customer disinterest
A group of organizations (i.e., sellers) offering goods or services that are similar and close substitutes for one another What’s an industry?
Is the market vs. industry distinction important?Why or why not?
Does industry attractiveness matter? Why or why not?
A Tool for Assessing Industry Attractiveness: Porter’s Five Forces Threat of new entrants Bargaining power of suppliers Bargaining power of buyers Rivalry among existing industry firms Threat of substitute products Source: Adapted from Michael E. Porter, “Industry Structure and Competitive Strategy: Keys to Profitability,” Financial Analysts Journal, July-August 1980, p. 33.
Porter: Win - Lose “ The implicit essence of Porter’s theory is that corporate competitiveness play is a “win by some - lose by some” play, where the firms which are competitively agile will alone sustain themselves and grow. In a sense Porter’s theory reflects modern corporate Darwinism where only the fittest would survive.”