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Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
Swot & porter
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Swot & porter

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  • 1. The External Environment:
    Opportunities, Threats, Industry Competition, and Competitor Analysis
  • 2. Components of the General Environment
    Economic
    Demographic
    Sociocultural
    Industry Environment
    Competitive
    Environment
    Political/Legal
    Global
    Technological
  • 3. SWOT Analysis
    Strengths
    Weaknesses
    Opportunities
    Threats
  • 4. The purpose of SWOT Analysis
    It is an easy-to-use tool for developing an overview of a company’s strategic situation
    It forms a basis for matching your company’s strategy to its situation
  • 5. SWOT is the starting point
    It provides an overview of the strategic situation.
    It provides the “raw material” to do more extensive internal and external analysis.
  • 6. Opportunities
    An OPPORTUNITY is a chance for firm growth or progress due to a favorable juncture of circumstances in the business environment.
    Possible Opportunities:
    Emerging customer needs
    Quality Improvements
    Expanding global markets
    Vertical Integration
  • 7. Threats
    A THREAT is a factor in your company’s external environment that poses a danger to its well-being.
    Possible Threats:
    New entry by competitors
    Changing demographics/shifting demand
    Emergence of cheaper technologies
    Regulatory requirements
  • 8. Opportunities and Threats form a basis for EXTERNAL analysis
    By examining opportunities, you can discover untapped markets, and new products or technologies, or identify potential avenues for diversification.
    By examining threats, you can identify unfavorable market shifts or changes in technology, and create a defensive posture aimed at preserving your competitive position.
  • 9. The purpose of Five-Forces Analysis
    The five forces are environmental forces that impact on a company’s ability to compete in a given market.
    The purpose of five-forces analysis is to diagnose the principal competitive pressures in a market and assess how strong and important each one is.
  • 10. Porter’s Five Forces
    Model of Competition
    Threat of New Entrants
    Threat of New Entrants
  • 11. Economies of Scale
    Product Differentiation
    Barriers to Entry
    Capital Requirements
    Switching Costs
    Access to Distribution Channels
    Cost Disadvantages Independent of Scale
    Government Policy
    Threat of New Entrants
    Expected Retaliation
  • 12. Porter’s Five Forces
    Model of Competition
    Bargaining Power of Suppliers
    Threat of New Entrants
    Threat of New Entrants
  • 13. Supplier industry is dominated by a few firms
    Suppliers exert power in the industry by:
    Suppliers’ products have few substitutes
    * Threatening to raise
    prices or to reduce quality
    Buyer is not an important customer to supplier
    Powerful suppliers can squeeze industry profitability if firms are unable to recover cost increases
    Suppliers’ product is an important input to buyers’ product
    Suppliers’ products are differentiated
    Suppliers’ products have high switching costs
    Supplier poses credible threat of forward integration
    Bargaining Power of Suppliers
    Suppliers are likely to be powerful if:
  • 14. Porter’s Five Forces
    Model of Competition
    Bargaining Power of Buyers
    Threat of New Entrants
    Threat of New Entrants
    Bargaining Power of Suppliers
  • 15. Buyers are concentrated or purchases are large relative to seller’s sales
    Buyers compete with the supplying industry by:
    Purchase accounts for a significant fraction of supplier’s sales
    Products are undifferentiated
    * Bargaining down prices
    * Forcing higher quality
    Buyers face few switching costs
    * Playing firms off of
    Buyers’ industry earns low profits
    each other
    Buyer presents a credible threat of backward integration
    Product unimportant to quality
    Buyer has full information
    Bargaining Power of Buyers
    Buyer groups are likely to be powerful if:
  • 16. Porter’s Five Forces
    Model of Competition
    Threat of Substitute Products
    Threat of New Entrants
    Threat of New Entrants
    Bargaining Power of Buyers
    Bargaining Power of Suppliers
  • 17. Products with similar functionlimit the prices firms can charge
    Products with improving price/performance tradeoffs relative to present industry products
    Example:
    Electronic security systems in place of security guards
    Fax machines in place of overnight mail delivery
    Threat of Substitute Products
    Keys to evaluate substitute products:
  • 18. Porter’s Five Forces
    Model of Competition
    Rivalry Among Competing Firms in Industry
    Threat of New Entrants
    Threat of New Entrants
    Bargaining Power of Buyers
    Bargaining Power of Suppliers
    Threat of Substitute Products
  • 19. Intense rivalry often plays out in the following ways:
    Jockeying for strategic position
    Using price competition
    Staging advertising battles
    Increasing consumer warranties or service
    Making new product introductions
    Occurs when a firm is pressured or sees an opportunity
    Price competition often leaves the entire industry worse off
    Advertising battles may increase total industry demand, but may be costly to smaller competitors
    Rivalry Among Existing Competitors
  • 20. Numerous or equally balanced competitors
    Slow growth industry
    High fixed costs
    High storage costs
    Lack of differentiation or switching costs
    Capacity added in large increments
    Diverse competitors
    High strategic stakes
    High exit barriers
    Rivalry Among Existing Competitors
    Cutthroatcompetition is more likely to occur when:
  • 21. The Five Forces are Unique to Your Industry
    Five-Forces Analysis is a framework for analyzing a particular industry.
    Yet, the five forces affect all the other businesses in that industry.
  • 22. Industry Environment
    Competitive
    Environment
    Competitor Analysis
    The follow-up to Industry Analysis is effective analysis of a firm’s Competitors
  • 23. Assumptions
    What assumptions do our competitors hold about the future of industry and themselves?
    Response
    Current Strategy
    What will our competitors do in the future?
    Does our current strategy support changes in the competitive environment?
    Where do we have a competitive advantage?
    Future Objectives
    How will this change our relationship with our competition?
    How do our goals compare to our competitors’ goals?
    Capabilities
    How do our capabilities compare to our competitors?
    Competitor Analysis
  • 24. Competitor Analysis
    Future Objectives
    What Drives the competitor?
    How do our goals compare to our competitors’ goals?
    Where will emphasis be placed in the future?
    What is the attitude toward risk?
  • 25. Competitor Analysis
    Future Objectives
    What is the competitor doing?
    How do our goals compare to our competitors’ goals?
    What can the competitor do?
    Current Strategy
    Where will emphasis be placed in the future?
    How are we currently competing?
    What is the attitude toward risk?
    Does this strategy support changes in the competitive structure?
  • 26. Future Objectives
    How do our goals compare to our competitors’ goals?
    Current Strategy
    Where will emphasis be placed in the future?
    How are we currently competing?
    What is the attitude toward risk?
    Does this strategy support changes in the competition structure?
    Competitor Analysis
    What does the competitor believe about itself and the industry?
    Assumptions
    Do we assume the future will be volatile?
    What assumptions do our competitors hold about the industry and themselves?
    Are we assuming stable competitive conditions?
  • 27. Future Objectives
    How do our goals compare to our competitors’ goals?
    Current Strategy
    Where will emphasis be placed in the future?
    How are we currently competing?
    What is the attitude toward risk?
    Assumptions
    Does this strategy support changes in the competition structure?
    Do we assume the future will be volatile?
    What assumptions do our competitors hold about the industry and themselves?
    Are we operating under a status quo?
    Competitor Analysis
    What are the competitor’s capabilities?
    Capabilities
    What are my competitors’ strengths and weaknesses?
    How do our capabilities compare to our competitors?
  • 28. Future Objectives
    How do our goals compare to our competitors’ goals?
    Current Strategy
    Where will emphasis be placed in the future?
    How are we currently competing?
    What is the attitude toward risk?
    Assumptions
    Does this strategy support changes in the competition structure?
    Do we assume the future will be volatile?
    What assumptions do our competitors hold about the industry and themselves?
    Capabilities
    What are my competitors’ strengths and weaknesses?
    Are we operating under a status quo?
    How do our capabilities compare to our competitors?
    Competitor Analysis
    Response
    What will our competitors do in the future?
    Where do we have a competitive advantage?
    How will this change our relationship with our competition?

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