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Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
Value chain & 5 f
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Value chain & 5 f

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  • 1. BUSINESS LEVEL STRATEGY ANALYSIS T P he ositioning Approach. P orter’s 5 F orces. Value Chain Analysis. T Generic Strategies. he
  • 2. The Positioning Approach The oldest approach to military strategy. The newest of the three prescriptive approaches to strategy . Design and Planning Approaches were explained in Chapter 3. Focuses on how firms in a given context differ in product market positions compared to the competition. 80
  • 3. Premises of The Positioning Approach Strategy follows structure. Looks at the groups of competitors in an industry. Relies more heavily on calculation than the design or planning schools. Places even more emphasis on the role of strategic planners. 81
  • 4. Porter’s Five Forces Analysis B reaking Apart Industry-L evel Competition 87
  • 5. Porter’s Five Forces Analysis Threat of Entry
  • 6. The 6 Barriers of Entry Economies of Scale. Product Differentiation. Capital Requirements. Cost Disadvantages Independent of Size. Access to Distribution Channels. Government Policy. 89
  • 7. Porter’s Five Forces Analysis Power of Buyers
  • 8. Buyer Power Determinants Bargaining Leverage.        Buyer Concentration Buyer Volume. Buyer Switching Costs. Buyer Information. Ability to Integrate Backward. Substitute Products. Pull-Through. 90
  • 9. Buyer Power Determinants Price Sensitivity.       Price/Total Purchases Product Differences. Brand Identity. Impact on Quality/Performance. Buyer Profits. Decision-Maker’s Incentives. 90
  • 10. Porter’s Five Forces Analysis Power of Suppliers
  • 11. Supplier Power Determinants Differentiation of Inputs. Switching Costs of Suppliers. Presence of Substitute Products. Supplier Concentration. Importance of Volume to Supplier. Cost Relative to Total Purchases in 90
  • 12. Porter’s Five Forces Analysis Power of Substitutes
  • 13. Power of Substitutes Relative Price Performance of Substitute. Switching Costs. Buyer Propensity to Substitute. 92
  • 14. Porter’s Five Forces Analysis Competitive Rivalry
  • 15. Determinants of Rivalry Industry Growth. Fixed Costs/Value Added. Intermittent Overcapacity. Product Differences. Brand Identity. Switching Costs. Concentration and Balance. Informational Complexity. Diversity of Competitors. Corporate Stakes. Exit Barriers. 92
  • 16. Determinants of Rivalry Industry Growth. Fixed Costs/Value Added. Intermittent Overcapacity. Product Differences. Brand Identity. Switching Costs. Concentration and Balance. Informational Complexity. Diversity of Competitors. Corporate Stakes. Exit Barriers. Competition is Everything!!!
  • 17. Value Chain Analysis Figure 3 98
  • 18. Value Chain Analysis n iin rg rg Ma Ma Ma Ma r rgii gn n ce ce rvi rvi Se Se g ng tn etii rke s rk s Ma Sa e Ma Salle & & nd nd ou ou tb t cs tb tiics Ou g s Ou giis Lo Lo s s on ion ati at er er Op Op d nd un s ou cs bo tiic nb g st IIn giis Lo Lo Primary Activities Figure 3
  • 19. Value Chain Analysis n iin rg rg Ma Ma Human Resource Management Technology Development Procurement Ma Ma r rgii gn n ce ce rvi rvi Se Se g ng tn etii rke s rk s Ma Sa e Ma Salle & & nd nd ou ou tb t cs tb tiics Ou g s Ou giis Lo Lo s s on ion ati at er er Op Op d nd un s ou cs bo tiic nb g st IIn giis Lo Lo Primary Activities Figure 3 Procurement S U P P O R T A C T I V I T I E S
  • 20. Value Chain Analysis Importance of value-chain analysis is that it provides a framework for identifying or 82
  • 21. Devising a Plan of Action Position the Company. Influence the Balance of the Forces. Anticipate Shifts in the Forces. 93
  • 22. Creating Families of Strategies 1 2 3 4 5 . Locating the core business. . Distinguishing the core business. . Elaborating the core business. . Extending the core business. . Reconceiving the core business. 94
  • 23. Creating Families of Strategies 1 . Locating the core business. 2 . Distinguishing the core business. 3 . Elaborating the core business. 4 . Extending the core business. 5 . Reconceiving the core business. The Core Business is reflected in the Choice of Generic Strategies
  • 24. Porter’s Generic Strategies Cost Advantage Lower Cost Broad Target Differentiation 1. Cost Leadership Competitive Scope Narrow Target Figure 4 99
  • 25. Porter’s Generic Strategies Cost Advantage Lower Cost Broad Target Competitive Scope Narrow Target Figure 4 1. Cost Leadership Differentiation 2. Differentiation
  • 26. Porter’s Generic Strategies Cost Advantage Lower Cost Broad Target 1. Cost Leadership Competitive Scope Narrow Target Figure 4 3A. Cost Focus Differentiation 2. Differentiation
  • 27. Porter’s Generic Strategies Cost Advantage Lower Cost Broad Target 1. Cost Leadership 2. Differentiation 3A. Cost Focus 3B. Differentiation Focus Competitive Scope Narrow Target Figure 4 Differentiation
  • 28. Strategies of Differentiation Price Differentiation. Image Differentiation. Support Differentiation. Quality Differentiation. Design Differentiation. Undifferentiation. 99
  • 29. Strategies of Scope Unsegmentation. Segmentation. Niche. Customizing. 100
  • 30. Elaborating the Core Business Penetration Strategies. Market Development Strategies. Geographic Expansion Strategies. Product Development Strategies. 101
  • 31. Elaborating the Core Business Penetration Strategies. Market Development Strategies. Geographic Expansion Strategies. Product Development Strategies.
  • 32. Ways to Elaborate a Given Business Existing Product New Product Existing Market P enetration Strategies P roduct Development Strategies New Market M arket Development Strategies Diversification Strategies Figure 5 101
  • 33. Questions ?
  • 34. End of Presentation

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