The External Environment:<br />Opportunities, Threats, Industry Competition, and Competitor Analysis<br />
Components of the General Environment<br />Economic<br />Demographic<br />Sociocultural<br />Industry Environment<br />Com...
SWOT Analysis<br />Strengths<br />Weaknesses<br />Opportunities <br />Threats<br />
The purpose of SWOT Analysis<br />It is an easy-to-use tool for developing an overview of a company’s strategic situation<...
SWOT is the starting point<br />It provides an overview of the strategic situation.<br />It provides the “raw material” to...
Opportunities<br />An OPPORTUNITY is a chance for firm growth or progress due to a favorable juncture of circumstances in ...
Threats<br />A THREAT is a factor in your company’s external environment that poses a danger to its well-being.<br />Possi...
Opportunities and Threats form a basis for EXTERNAL analysis<br />By examining opportunities, you can discover untapped ma...
The purpose of Five-Forces Analysis<br />The five forces are environmental forces that impact on a company’s ability to co...
Porter’s Five Forces <br />Model of Competition<br />Threat of New Entrants<br />Threat of New Entrants<br />
Economies of Scale<br />Product Differentiation<br />Barriers to Entry<br />Capital Requirements<br />Switching Costs<br /...
Porter’s Five Forces <br />Model of Competition<br />Bargaining Power of Suppliers<br />Threat of New Entrants<br />Threat...
Supplier industry is dominated by a few firms<br />Suppliers exert power in the industry by:<br />Suppliers’ products have...
Porter’s Five Forces <br />Model of Competition<br />Bargaining Power of Buyers<br />Threat of New Entrants<br />Threat of...
Buyers are concentrated or purchases are large relative to seller’s sales<br />Buyers compete with the supplying industry ...
Porter’s Five Forces <br />Model of Competition<br />Threat of Substitute Products<br />Threat of New Entrants<br />Threat...
Products with similar functionlimit the prices firms can charge<br />Products with improving price/performance tradeoffs r...
Porter’s Five Forces <br />Model of Competition<br />Rivalry Among Competing Firms in Industry<br />Threat of New Entrants...
Intense rivalry often plays out in the following ways:<br />Jockeying for strategic position<br />Using price competition<...
Numerous or equally balanced competitors<br />Slow growth industry<br />High fixed costs<br />High storage costs<br />Lack...
The Five Forces are Unique to Your Industry<br />Five-Forces Analysis is a framework for analyzing a particular industry.<...
Industry Environment<br />Competitive<br />Environment<br />Competitor Analysis<br />The follow-up to Industry Analysis is...
Assumptions<br />What assumptions do our competitors hold about the future of industry and themselves?<br />Response<br />...
Competitor Analysis<br />Future Objectives<br />What Drives the competitor?<br />How do our goals compare to our competito...
Competitor Analysis<br />Future Objectives<br />What is the competitor doing?<br />How do our goals compare to our competi...
Future Objectives<br />How do our goals compare to our competitors’ goals?<br />Current Strategy<br />Where will emphasis ...
Future Objectives<br />How do our goals compare to our competitors’ goals?<br />Current Strategy<br />Where will emphasis ...
Future Objectives<br />How do our goals compare to our competitors’ goals?<br />Current Strategy<br />Where will emphasis ...
Upcoming SlideShare
Loading in...5
×

Swot & porter

6,165

Published on

Published in: Business, Technology
1 Comment
5 Likes
Statistics
Notes
No Downloads
Views
Total Views
6,165
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
311
Comments
1
Likes
5
Embeds 0
No embeds

No notes for slide

Swot & porter

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

    Clipping is a handy way to collect important slides you want to go back to later.

×