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MBA Business Frameworks Toolkit I
 

MBA Business Frameworks Toolkit I

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Collection of 15 core strategic and operational frameworks—over 100 instructional slides and ready to use PowerPoint diagram templates. ...

Collection of 15 core strategic and operational frameworks—over 100 instructional slides and ready to use PowerPoint diagram templates.

The frameworks include the following:
Porter’s Five Forces,
Customer Experience,
Market Sizing & Share,
Company & Competitor Analysis,
PEST Analysis,
Industry Attractiveness & Business Strength Assessment,
BCG Growth-Share Matrix,
Key Success Factors Analysis,
Product Life Cycle,
Economics of Scale,
Adoption Cycle,
Value Chain Analysis,
SWOT Analysis,
SWOT Strategies, and
Balanced Scorecard.

For additional frameworks, check out the MBA Toolkit II (http://learnppt.com/powerpoint/14_MBA-Toolkit-II.php) and the MBA Toolkit III (http://learnppt.com/powerpoint/16_MBA-Toolkit-III.php).

Download @ http://learnppt.com/powerpoint/
PowerPoint Tutorials @ http://pptdiagrams.wordpress.com/

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MBA Business Frameworks Toolkit I MBA Business Frameworks Toolkit I Presentation Transcript

  • PowerPoint Diagram Pack MBA Toolkit I Collection of 15 core strategic and operational frameworks—over 100 instructional and template slides
    • Check out our site for all your PowerPoint needs!
    • http://learnppt.com – Find our eBook on creating effective and professional presentations. Covers basic to advanced concepts, including storyboarding, diagramming, and the Consulting Presentation Framework.
    • http://learnppt.com/powerpoint -- Shop our catalog of Diagram Packs. We try to add more Packs monthly. All of our diagrams are professionally designed by ex-management consultants from top firms.
    • Porter’s Five Forces
    • Customer Experience
    • Market Sizing & Share
    • Company & Competitor Analysis
    • PEST Analysis
    • Industry Attractiveness & Business Strength Assessment
    • BCG Growth-Share Matrix
    • Key Success Factors Analysis
    • Product Life Cycle
    • Economics of Scale
    • Adoption Cycle
    • Value Chain Analysis
    • SWOT Analysis
    • SWOT Strategies
    • Balanced Scorecard
  • Contents
    • Porter’s Five Forces 4
    • Customer Experience 29
    • Market Sizing & Share 35
    • Company & Competitor Analysis 49
    • PEST Analysis 59
    • Industry Attractiveness & Business Strength Assessment 62
    • BCG Growth-Share Matrix 68
    • Key Success Factors Analysis 74
    • Product Life Cycle 82
    • Economies of Scale 89
    • Adoption Cycle 95
    • Value Chain Analysis 100
    • SWOT Analysis 106
    • SWOT Strategies 111
    • Balanced Scorecard 115
    FRAMEWORK SLIDE
  • 1. Porter’s Five Forces
  • Porter’s five forces – introduction
    • Porter’s five forces constitutes a framework for analysing a company’s environment (or industry structure):
      • Porter first structured the framework in his 1980 book Competitive Strategy.
    • Porter assumes that competition in an industry depends on five basic forces:
    • The collective strength of these forces determines the ultimate profit potential and allocation in the industry.
    What It Is Why We Use It Strengths & Limitations Industry Competitors Substitutes Potential Entrants Buyers Suppliers Rivalry Among Existing Firms Bargaining power of buyers Bargaining power of suppliers Threat of substitute products or services Threat of new entrants Source: M.E. Porter, Competitive Strategy , 1980, p. 4 Free Press.
    • Strengths:
      • Quite comprehensive framework.
      • Good starting point to understand key drivers and trends.
    • Limitations:
      • Very often used strictly qualitatively.
    • Assess attractiveness on the basis of competition in an industry.
    • Highlight areas in which industry trends may pose opportunities or threats.
    • Analyze where the company stands vis-a-vis the underlying causes of each competitive force.
    • To understand/diagnose levels of return.
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Porter’s five forces THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ 4. Suppliers Suppliers negotiation power 2. Competitors in the industry Rivalry among existing companies 1. Potential new competitors Threat by new competitors 3. Substitution products Threat by substitution products 5. Customers Buyers’ negotiation power
  • Porter’s five forces – potential insight/output Pressure from Substitute Products Bargaining Power of Buyers Bargaining Power of Suppliers Threat of New Entrants Intensity of Rivalry Low, stable returns Low, risky returns High, stable returns High, risky returns Exit Barriers Entry Barriers L H L H Cost Leadership Differentiation Cost Focus Differentiation Focus Competitive Advantage Competitive Scope Broad Narrow Lower Cost Differentiation
    • Several important economic and technical characteristics of an industry are critical to the strengths of each competitive force:
    • A supplier group is powerful when:
    • It is dominated by a few companies and is more concentrated than the industry it sells to.
    • There are no substitute products.
    • The industry is not an important customer.
    • Its products are important to the industry.
    • Products are differentiated or suppliers have built up switching costs.
    • It poses a credible threat of forward integration.
    • Barriers to entry:
    • Economies of scale (including shared resources)
    • Product differentiation (proprietary)
    • Capital requirements
    • Switching costs
    • Access to distribution channels
    • Cost disadvantages independent of scale
    • Government policy
    • Expected reaction of incumbent
    • Intense rivalry results from:
    • Numerous or equally balanced competitors
    • Slow industry growth
    • High fixed or storage costs
    • Lack of differentiation or switching costs
    • Capacity augmented in large increments
    • Diverse competitors
    • High strategic stakes
    • High exit barriers
    • A buyer group is powerful when:
    • It is concentrated or purchases large volumes relative to seller sales.
    • The products represent a significant fraction of the buyers’ costs or purchases.
    • The products are standard or undifferentiated.
    • It faces few switching costs.
    • It earns low profits.
    • It poses a credible threat of backward integration.
    • The bought product is unimportant.
    • It has full information.
    • Search for products that can perform the same function.
    • Assess buyers’ propensity to substitute.
    • Focus on those that:
    • Are improving their price performance trade-off compared with the industries products.
    • Require low switching costs.
    • Are produced by industries earning high profits.
    • Take offensive or defensive actions to create a defensible position against the forces:
      • Positioning the firm so its capabilities provide the best defence
      • Influencing the balance of forces through strategic moves
      • Anticipating shifts in the factors underlying the forces and responding to them
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • The publishing industry has seen only modest increases in sales in recent years Total U.S. printed media revenues, 1989-1999 Includes both consumer and advertising spending Source: Veronis, Suhler & Associates; S&P Industry Survey Note: Magazine and newspaper spending includes both advertising and consumer spending The internet provides an innovative new distribution medium that magazines and newspapers can use to recover readers and lure advertisers.
      • 99E
      • 98E
      • 97E
      • 96E
      • $ Billions
      • 95E
      • 94
      • 93
      • 92
      • 91
      • 90
      • 89
    Total revenues CAGR Newspapers Books Magazines
    • Newspaper and magazine revenue growth has been driven by price increases, as circulation has been flat to falling
    • Newspapers and magazines share of total advertisers’ spending has also fallen from 32% to 28% over the last five years
    • Book publishers have seen growth in book unit volumes, with stable prices:
      • Books remain a popular source for access to fiction and non-fiction despite a growing number of substitutes
      • Recent growth of discount stores has helped increase sales
    1989-1994 4.6% 1994-1999E 5.7% THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ EXAMPLE
  • The stock market, unsure of publishing’s future role, is not rewarding print-focused players Value of $100 invested in March 1985 Source: Compustat Note: All dividends reinvested. Indices track independent, “pure play” print media companies in each print segment Publishing companies must to transition to full media companies, expanding beyond print to distribute their products to be seen as long-term competitors. The Wall Street appeal of online involvement could help publishers who proactively use the new distribution medium maa-85 maa-86 maa-87 maa-88 maa-89 maa-90 maa-91 maa-92 maa-93 maa-94 maa-95 THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ EXAMPLE
  • Leaders in the PC business have changed as quickly as the need for computing power New entrants and industry consolidation are forcing competitors to continually redefine their business strategies. U.S. Unit Market Share of top 10 competitors (quarterly changes in market share)
      • 40%
      • 30%
      • 20%
      • 10%
      • 0%
    U.S. Unit Market Share
      • 70%
      • 60%
      • 50%
    2Q 1994 4Q 1994 4Q 1993 CompanyX 1Q 1994 3Q 1993 2Q 1993 1Q 1993 3Q 1994 CompanyX CompanyX CompanyX CompanyX CompanyX CompanyX CompanyX CompanyX CompanyX THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ EXAMPLE
  • Gross margins have declined as the PC becomes a commodity product Average PC makers’ revenue spending Top PC makers’ gross margin, 1989-1994 Taiwanese hardware manufacturers, such as Acer, have experienced 25% compound annual revenue growth since 1986 by being the lowest cost suppliers to the top PC makers worldwide.
      • $1.00
    Revenue
      • $0.76
    Cost of goods $0.04 R&D $0.13 Mktg. & distribution $0.02 SG&A
      • $0.05
    Operating profit
      • % Gross margin
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ EXAMPLE
  • Several factors determine the bargaining power of buyers
    • A buyer group is powerful when:
      • It is concentrated or purchases large volumes relative to seller sales
      • Its purchases from the industry represent a significant fraction of the buyers’ costs or purchases
      • It purchases standard or undifferentiated products
      • Brand identification is low
      • Its switching costs are low
      • Its profits are low
      • It poses a credible threat of backward integration
      • Its purchases from the industry is unimportant for the quality of its products or services
      • It possesses full information
    These factors may change over time and alter buyer power. THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Bookstores are the only channel with the ability to exert pressure on publishers Limited bandwidth will slow book publishers’ ability to distribute products on-line, but could bypass bookstores through Internet-based mail-order services and other creative services. Publishers
    • These large national stores played a central role in boosting book sales to record levels in 1994, but put pricing pressure on publishers
    • For newspapers and magazines the customer-base is more fragmented
    Convenience Stores & Newsstands Direct Distribution (subscription) Other retail outlets Schools & Universities
    • Bookstores U.S. Retail Market Share, 1994
    • Barnes & Nobles 17.3%
    • Borders-Walden 16.1%
    • Crown Books 3.2%
    • Books-a-Million 1.8%
    • Total retail market of $9.4 billion 38.4%
    Primarily newspapers and magazines Primarily books THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ EXAMPLE
  • Distinct distribution channels serve the two major different end-user segments Business Massive increase of home PC usage has increased the strength of the mainstream channel, especially retailers. Source: IDC and Merrin Information Services, Inc. Channels Direct Sales System Integrators (SI) Value-Added Resellers (VAR) Dealers Computer Superstores Mass Merchants Consumer Electronic Stores Office Stores Mail Order Direct Response Value-added channels Mainstream channels Definitions Those sales made by a manufacturers’ sales force, agent, or representative Provide customized value-added solutions for clients Offer unique, tangible solutions “off-the-shelf” to targeted customers The “traditional” computer dealer channel. Do not add unique value to the system but do offer some value in the form of support, training, or other services Large, well-merchandized store fronts , with most revenue generated by computer-related sales Typically offer a wide range of products, including computer-related equipment Offer a wide range of electronic merchandise, including computer-related items Retailers and resellers focusing on office supplies Third-party computer sales that use telephone to perform all levels of sale Direct telephone sales from manufacturers not using third parties Typical buyer Home users THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ EXAMPLE
  • Substitute products exist
    • Substitutes place a ceiling on the product’s price
    • Identification: A product that performs the same function
    • Position vis-a-vis substitute products may be a matter of collective industry actions
    • Penetration by the substitute depends on:
      • Existence of substitutes
      • The price-performance trade-off
      • Tendency of purchasers to reach for substitutes
      • Switching costs
      • Risks of failure
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Supply Chain pressures have encouraged publishers to explore non-print opportunities Print publishers are rushing into these substitutes to pre-empt a push from niche players. New innovation As a substitute for … THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ EXAMPLE  
        • Online / internet
     
        • CD-ROM
        • Books on cassette
        • Fax Services
      Telephone Info. Services Newspapers Magazines Books
  • Several substitute end-user devices look to compete with PCs for a share of internet hardware revenues Substitutes to PC access will focus on specific applications, leaving a significant need for multi-functional PCs. THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ EXAMPLE
    • Most Internet applications, except those requiring enormous client processing capability
    • Too narrowly focused given increasing penetration of broader-use PCs
    Low costs and user complexity Internet Appliance Low cost, low power appliances focused mainly at Internet access
    • Mail and messaging
    • Some commerce
    • Limited applications
    Low costs Screen Phones Adapted telephones, with screen, modem, and keypad, for basic operations
    • Real time video broadcast
    • Difficult to read, especially if extend to use with productivity software
    User comfort Interactive Televisions Set-top or internal devices which transform the TV into an interactive Internet device
    • Remote access to Internet
    • Expensive
    • Slow, difficult interface
    Highly portable Personal Digital Assistants (PDAs) Hand-held communications devices Potential application Limitations Advantages Substitutes
  • Paper companies’ strong leverage is pushing publishers to explore non-print options Many newspapers and magazines are already on the web, piloting the feasibility of an online presence.
    • Many publishers and printers have seen the price of paper double in the first half of 1995 alone:
      • A world paper shortage has resulted from increased demand for paper-based information
      • North American paper producers have the option to sell to more lucrative foreign markets, leading to a sharp rise in North American exports
      • Foreign producers also prefer to sell to more lucrative markets
    • Even partial movement towards non-print media affords publishers greater bargaining power with conventional suppliers
    Independent Printers Other Ink Suppliers Paper Companies North American Market Share, 1994 Top 5 Top 10 Books 51.2% 74.7% Magazines 56.7% 86.5% Newspapers 41.1% 64.4% Publishers Source: Publishers Weekly THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ EXAMPLE
  • As hardware makers continue to look for ways to cut costs, suppliers’ leverage will increase A high pace of innovation, combined with increased competition, will fuel an overall increase in supplier leverage. THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ EXAMPLE
    • As margins are squeezed, PC makers will increasingly rely on affordable components suppliers
    • Suppliers like Intel, which already makes mother-boards, will increasingly integrate PC component making operations into their in-house capabilities
    • PC OEMs will increasingly look to outsourcing to cut costs
    • Contract manufacturers leverage will increase as they take on more responsibility for segments of the value chain
    • Will increasingly have the ability to integrate down the value chain
    • Motorola’s PowerPC chip is slowly gaining market share through the efforts of Apple and IBM
    • Clone chipmakers are becoming more competitive with the Pentium (e.g. Cyrix, AMD and NexGen)
    • Through at least the year 2000 operating system developers will maintain their already dominant positions
    • New browsers and client / server models will change the role
      • Rationale
      • Supplier leverage (incr. / decr.)
    • Supply the vital components for assembling PCs, including motherboards and other peripherals
    • Looked to for third party manufacturing and assembly
    • Intel manufactures supplies 85% of all processors for PCs, competes mainly with Motorola
    • Increasing need for client computing power has resulted in a reliance on cutting edge processor providers with the latest in technology
    • Microsoft, with over 80% of PC operating systems, and Novell, with a similarly high network presence, domi-nate this supplier segment. PC makers must ensure hardware compatibility
    • Other players: Apple and IBM
      • Existing relationship
    Component makers Contract manufacturers Processor makers Operating systems
  • Porter’s five forces – top tips Hints and Pitfalls Data Sources Related Analytics
    • Industry reports
    • Analysts’ reports
    • Database searches
    • See also related analytics sources
    • Do:
      • Define precisely the industry before conducting analysis.
      • Quantify your findings where possible.
    • Don't:
      • Just use as a static tool – show trends in each of the areas.
    • PEST
    • SWOT
    • Segment attractiveness
    • Product life cycle
    • Product substitution
    • Competitors comparison
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Porter’s five forces Analyze industry structure Identify rules of the industry and derive chances and risks Develop and implement measures 1 2 3 THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Porter’s five forces Economies of scale Product differentiation Brand identity Conversion costs Access to sales channels Capital needs Access to state-of-the-art technology Access to raw materials Protection by government Experience effect Specialised assets One-time exit costs Strategic linkages Emotional restraints Legal and social restrictions Number of comparable competitors Industry growth Fixed or storage costs Product characteristics Capacity increases Diversification of competitors Strategic assignments Entry barriers Exit barriers Rivalry among competitors little poor poor low broad low broad broad not available unimportant many high many many many many slow high consumables large steps high many Highly unattrac- tive Un- attractive Neutral Attrac- tive Highly attractive high pronounced high high limited high limited limited strong very important few low few few few few fast low specialised prod. continuous low few THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Porter’s five forces Number of important buyers Availability of substitution products from other industries Buyers’ conversion costs Buyers’ threat with backward integration Industry’s threat with forward integration Importance for the quality or service of the buyers Buyers’ total costs in the industry Buyers’ profitability Number of important suppliers Availability of substitution products for the suppliers’ products Differentiation or conversion costs for delivery products Delivery’s threat with forward integration Industry’s threat with backward integration Suppliers’ importance for the quality or service of the industry Overall industry costs caused by suppliers Importance of the industry for the supplier group Buyers’ negotiation power Suppliers’ negotiation power few high low strong strong high large share low few low high strong strong high large share low many low high weak low low small share high many high low weak weak low low share high Highly unattrac- tive Un- attractive Neutral Attrac- tive Highly attractive THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Porter’s five forces Availability of closely related substitution products Users’ conversion costs Profitability and aggressiveness of the substitution product manufacturers Value for money of substitution products Industry protection Industry regulations Availability of substitution products Authority measures high low high high disadvantageous disadvantageous low high low low advantageous advantageous Political continuity International capital transfer low limited high unlimited Customs Foreign exchange operations high limited low unlimited Foreign ownership Help for competitors limited substantial unlimited no Highly unattrac- tive Un- attractive Neutral Attrac- tive Highly attractive THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Porter’s five forces Competitive Dimensions Potential competitors Factors Influencing the Relevant Competitive Dimensions
    • Market entry barriers for new competitors are:
      • Economies of scale
      • Product differences reflected by a corresponding buyer loyalty
      • High capital need for market entry
      • Conversion costs for the buyer when switching to another product
      • Extraordinarily good and expensive sales channels
      • Size-independent cost advantages (patents, raw materials, location, subsidies, governmental barriers)
    Short Characterization of the Industry New competitors
    • Intensive rivalry emerges from:
      • Many similar competitors
      • Weak industry growth
      • High fixed costs in case of high capacity reserves
      • Differentiation of competitors only via the price
      • High strategic stakes (gains in market share at any cost)
      • High exit barriers
    Threat of substitution
    • Substitution threat develops due to:
      • Real or potential attractive substitution products
      • Offensive marketing for substitution products and services
      • Impossible defense against substitution products e.g. via common standards, using sales channels etc.
      • New products due to technology development
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Porter’s five forces Competitive Dimensions Suppliers Factors Influencing the Relevant Competitive Dimensions
    • Factors increasing the suppliers’ negotiation power :
      • Large competitive advantages of the delivered product
      • Low number of potential suppliers
      • Great importance of the product for the quality of the client’s product
      • High conversion costs when switching the supplier
      • Low significance of the client for the supplier
      • Credible interest in a forward integration
    Short Characterization of the Industry Customers
    • Factors increasing the buyers’ negotiation power:
      • High market power at buyer side
      • Large number of alternative providers for the buyer (standardised exchangeable products)
      • Cost and market transparency for the buyers (ex. marketplaces)
      • Few buyers emerge in a concentrated fashion
      • Low conversion costs and risks for the buyer when switching the supplier
      • High industry products’ share of total costs at buyer side (strategic purchasing policy)
      • Revenue problems at buyer side, who want to pass them on to their suppliers
      • Credible threat with backward integration in the value chain
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Porter’s five forces THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ Overall assessment Authority measures Availability of substitution products Suppliers’ negotiation power Buyers’ negotiation power Rivalry of competitors Exit barriers Entry barriers high middle low high middle low Future Currently Industry Attractiveness
  • Porter’s five forces THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ Overall assessment … … … … … … … high middle low high middle low Future Currently Industry Attractiveness
  • 2. Customer Experience
  • Customer experience – introduction What It Is
    • Illustrates key areas of customers interactions with a business:
      • Usually shown as a succession of interaction with a company
      • Should account for what the customer goes through from the time they first become aware of a product to the point they stop using it
      • Can be generic for an industry or specific for a given company
    • Provides a starting point to identify areas of potential differentiation
    • Answers a series of questions as to what, where, when, how and why customers buy, e.g.:
      • How do consumers become aware of their needs?
      • How do consumers order and purchase?
      • How is your product repaired or serviced?
    • Highlights what criteria are important to customers in purchase and discontinuation decisions
    • A variant of the value chain concept:
      • Plots customer interaction against it
    Why We Use It
    • Understand what events affect the customer’s relationship to decide what levers the client should manage strategically and operationally to retain the customer
    • Highlight what processes are key to efficiently serve and retain the customer:
      • Both practical (eg. switchboard) and technical (eg. R&D)
    • Help focus creativity on areas where opportunities to create a competitive advantage appear
    Strengths & Limitations
    • Strengths:
      • Interprets the industry/company value chain from customers’ perspective
        • Helps put them in their customers’ shares:
      • Can help make understanding very tangible for clients:
        • Puts them in their customers’ shoes.
    • Limitations:
      • Lengthy process
      • Requires wide ranging customer surveys
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Customer experience – how to do it
        • 1. Get a rough understanding of how and why consumers are buying:
          • Analyse consumer surveys
          • Talk to experts in the client company
          • For each key dimension of the customer experience, capture:
            • What takes place, where, with whom, and how
            • What influences the customer and why
            • What customers are satisfied/dissatisfied with and why
          • Validate your understanding with customers:
          • Conduct customer focus groups and customer interviews
        • 2. Map the customer’s experience to the client’s processes
        • 3. Identify associated activities—to deliver the customers’ experience
        • 4. Use focus groups to analyse where areas exist for potential improvement
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Customer experience – illustrative output
    • An Illustration of Customer Experience in the Telcos
    Product Development Sales Credit Checking Set-up & Activation Delivery Usage Customer Services Billing & Collection Service Termination Branding & Positioning The Customer Experience Delivering the Customer Experience Activities to Deliver the Customer Experience Brand awareness Product & service availability Ease of buying Ease of connection The First Experience Usage quality Quality of service Ease of leaving Company/Industry Value Chain Source: London Shop Training Module: “Production Market/Industry Analyses and Using Strategic Frameworks”, 27/2/98, p. 14. THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Customer experience – top tips Potential Insights Hints and Pitfalls
    • Highlights typical source of customer satisfaction and retention by appreciating the context within which each step of the consumption chain unfolds
    • Suggests levers for differentiation
    • Provides a basis for exploring many non-traditional ways to create value
    • Do:
      • Perform the exercise for each important customer segment
      • Compare customers’ actual experience with your client’s perception of what that experience is
      • Link to functions and processes
      • Use personal experience a a starting point to understand the process
    • Don’t:
      • Over simplify the customer experience:
        • Its complexity may suggest levers for differentiation
      • Develop your point of view from a too limited set of specific experiences
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Customer experience – data sources, case examples and related analytics Data Sources
    • Personal experience
    • Customer survey
    • Interviews:
      • Customer
      • Experts
    • Focus groups
    • Market research
    • Experience on other projects
    Related Analytics
    • Most useful when conducting a customer analysis
    • Can be complemented by the following analytics:
      • Needs based segmentation
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • 3. Market Sizing and Share
  • Market-sizing and share – introduction What It Is Why We Use It Strengths & Limitations
    • Quantifying the size and growth of a market or segments either by:
      • Value (of revenue or profitability over a specified period).
      • Volume (of units produced over a specified period).
    • As with many strategy analyses, it is important to show the dynamic, i.e. quantify the size of a business or segment over time:
      • Historically (over a number of years).
      • Forecasting (projecting out over future years).
    • In some cases, market size may be available from secondary data sources—otherwise we must estimate it.
    • Measure of how much of a business market or segment individual competitors account for.
    • Market share can be measured by:
      • Value (i.e. proportion of total revenue or profit).
      • Volume (i.e. proportion of total units produced).
    • Typically, we look at both absolute market share, and relative market share (i.e. share compared with other competitors’).
    • There are several market share measures:
      • Absolute and relative share of total business market.
      • Absolute and relative share of total business segment.
      • Absolute and relative share of total addressable market (i.e. segments in which our client competes).
    • Help determine absolute and relative share of competitors in a business or segment:
      • Essential to understand which competitors are successful or unsuccessful.
    • Helps determine the attractiveness of a business or segment:
      • Its size.
      • Whether it is growing, flat, or shrinking.
      • Relative attractiveness compared with other businesses or segments.
    • Determine the power of competitors compared with each other, customers, and suppliers.
    • To determine the relative performance and position of competitors, and how this is changing over time:
      • Who’s successful/unsuccessful? Why?
      • Are new entrants gaining share?
      • Are substitutes being used?
    • In conjunction with other analytics, establishes whether share builds other advantages, e.g. lower unit costs, RMS vs. ROCE.
    • Strengths:
      • Provides a quantitative measure of business of segment attractiveness.
      • Provides the key benchmark against which we measure market share, and determine relative performance of competitors.
      • Essential to understanding competitors’ relative size, importance, and performance.
    • Limitations:
      • Sizing a market from scratch can take weeks or months.
      • Not the only determinant of attractiveness c.f. potential to make money.
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Market sizing and share – how to apply it
    • Market Sizing
    • Understand how sources size the market (i.e. methodology).
    • Evaluate reliability of source data.
    • Try to obtain 2–3 independent estimates of market or segment size, and cross-check estimates.
    • Understand trends in market size and underlying root causes.
    • Validate total size and trends with client and/or industry experts.
    • Identify key drivers of market size, e.g.:
      • Number of customers in total business or segment.
      • Number of units of goods or services (e.g. number of flights, number of cars produced).
      • Average number of units purchased per customer.
    • Identify key drivers of future market size, e.g.:
      • Relevant macroeconomic trends.
      • Changes influencing customer demand.
      • Changes in number of customers, or average purchases per customer.
    • Develop methodology to size the market—there are two broad approaches:
      • Top-down, i.e. from macro-variables (e.g. total size of related businesses).
      • Bottom-up, i.e. from micro-variables (e.g. number of customers).
      • Often we use both a top-down and bottom-up approach to check results.
    • Develop picture of how things have changed over time:
      • What is the 5 year growth rate?
      • Calculate Compound Annual Growth Rate (CAGR).
    • Split out real and nominal growth for value basis, i.e. adjust for inflation.
    • The time available and degree of accuracy required will determine choice of methodology.
    • Once you have developed your methodology, the key stages are:
      • Developing and documenting assumptions.
      • Gathering data.
      • Building market size estimates.
      • Validating and refining market size estimates.
    Sizing Based on Publicly Available Data Constructing Own Estimate of Market Size THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ CAGR = Current size Starting size n = number of years growth 1 / n
  • Market sizing and share – how to apply It
    • Calculating Market Size
    Various Market Share Measures Exist Measure of Share How to Do Absolute Market Share – Business Total Company Sales Total Market Sales Absolute Market Share – Segment Company Segment Sales Market Segment Sales Relative Market Share – Business 1 Total Company Sales Total Sales of Largest Competitor Relative Market Share – Segment 1 Company Segment Sales Biggest Competitors’ Segment Sales Steps before Determining Market Share
    • Determine the business market(s) or segments to be sized
    • Size the business market(s) or segment(s):
      • See Market-sizing
    • Identify the company's or individual competitors’ sales, profits or units of output
    1 If company is the largest, compare to other players. THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Market-sizing and share – Illustrative output
    • Market Sizing
    Evolution of sales by Business Segment Evolution of % of Total Sales by Business Segment THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ Business CAGR Other 9 % Medipsy 11 % GSMS 301 % Dynamis 23 % Acute care 25 % Overall 24 % 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 1993 1994 1995 1996 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1993 1994 1995 1996
  • Market-sizing and share – top tips Potential Insights
    • Do:
      • Sanity check first (comparisons with GDP, demographic data, other countries).
      • Cross-check all data (both publicly available market size data and own estimates).
      • Test/validate with client market size assumptions and output.
      • Gather past, present, and future market size estimates.
      • Probe for the root causes of changes in total market size.
      • Ensure consistency between methodology for measuring total market size and measuring individual companies’ performance.
      • Look at relative share (i.e. not solely absolute share).
    • Don’t:
      • Only use this data to determine attractiveness
      • Just use to size revenue (can size by other units, e.g. units at output).
      • Over analyse—insight often comes from other analysis.
      • Assume a client’s calculation is correct:
      • Always check industry assumptions.
      • Forget to look at historical developments.
    Hints & Pitfalls
    • Analytic helps determine:
      • Industry attractiveness (past, present, future).
      • Relative success of competitors (when used to determine absolute and relative market share).
      • Competitive pressure (from growth rates and consolidation).
      • Degree of market concentration/fragmentation.
      • Relative performance of competitors, and how this is changing.
      • Critical issues to probe further (e.g. why competitor X is gaining share; cost advantages of holding dominant share).
      • Hypotheses regarding market share and profitability of competitors.
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Market-sizing and share – data sources, case examples and related analytics
    • Publicly available data:
      • Client’s data (business plans, and internal reports)
      • Annual reports (for client and competitors)
      • Broker reports (from investment banks)
      • Industry reports
      • Database sources
      • Industry associations
    • Covered in relevant sections on related analytics:
      • No additional data required to determine market share.
    • Market-sizing is a critical step within Business Definition (see introduction of this section)
    • Company/competitor analysis
    • Financial analysis/ratios analysis
    Data Sources Related Analytics THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Markets can either be sized using data from a 3rd party provider, or by creating an approximation in-house In reality it is rare to be able to pluck a market size estimate directly from a 3 rd party. Approaches to market sizing Publicly available data from 3rd party Not publicly available data from 3rd party Top down Bottom up x + y + z a + b + c $ $ $ Create an in-house approximation using component data and proxies / assumptions where necessary THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Whenever data from a 3rd party is used to estimate a market size or as part of a sizing calculation, certain ‘tests’ should be applied Just because a 3 rd party has published a figure, does not mean it is correct or exactly meets your needs. Why important
    • Definition or scope of market may be different
    • Source must be credible with client. Are the assumptions valid?
    • Gives a degree of confidence and a sense check of ‘the answer’
    • Industry experts hold good credibility and may provide information that is not available from a 3rd party report
    Checklist for 3rd party data
    • Understand how sources size the market i.e. methodology
    • Evaluate reliability of source data
    • Try to obtain 2-3 independent estimates of market or segment size, and cross-check estimates (triangulation of data)
    • Use opinion from industry experts – vital to confirm this with other industry experts and to validate with your client
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Top-down and bottom-up approaches are used for different purposes, and each approach has associated advantages / disadvantages Whichever method is used, it is important to clearly present your method, assumptions and data sources. When to use Likely type of data sources Advantages / disadvantages
    • When answer is required quickly
    • High degree of accuracy is not required – approximation only
    • No data available to support bottom-up
    • Global / national statistics e.g. adults in UK
    • Macro industry level data e.g. size of beverage industry
    • Percentage splits / data points to break down high level data e.g. % of adults in UK who drink coffee
    • Can be as quick and simple as required
    • Gives a good estimate of the rough size
    • Highly assumption driven and less accurate than bottom-up
    • Answer may produce a large range
    • When a more detailed and accurate answer is required
    • To validate a top-down approximation
    • Company specific data of organization in the segment / industry
    • Data for substitute products or comparable markets / industries
    • Data for a certain / partial time period
    • Customer data
    • Most accurate way to approximate size if no 3rd party data available
    • Can be time consuming, very detailed and require high level of logic and cross-referencing of data
    Top-down Bottom-up THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Top-down – a worked example
    • How many people go on the London Eye every year?
    Total potential visitors to London Total visitors to London Total visits to tourist attractions Total visitors to London Eye Foreign visitors to London Foreign visitors to London Foreign visitors to London UK (non London) residents UK visitors to London UK (non London) residents London residents London residents London residents 1m 1m 4m 50m 10m 20m 10m 10m 10m 61m 21m 34m
    • Assumption
    • There are 25 main tourist attractions in London, who each have an equal number of visitors
    Assumption: 20% visit London once a year Assumption: 4 tourist attractions per person Assumption: 2 tourist attractions per person Assumption: 1 tourist attrac- tion per year THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Bottom up – a worked example
    • How many people go on the London Eye every year?
    Visitor capacity of London Eye per hour Summer visitors to London Eye Winter visitors to London Eye Total annual visitors to London Eye Number of pods Av. occupancy of pods per hour Av. occupancy of pods per hour Rotation of each pod per hour Opening hours Opening hours Capacity of each pod Opening days (26 weeks) Opening days (26 weeks) 20 pods 50% of 1000 25% of 1000 2 rotations 12 hours 6 hours 25 people 7 days per week 5 days per week 1000 people per hour 1.09m summer visitors 0.20m winter visitors 1.29m visitors x x x x x x THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Having sized an industry, it is important to understand historic and future growth rates
    • Calculating growth rates for a particular market
    Understanding why the market is growing or contracting is just as important as determining what the growth is. How can you get that information? What type of information are you looking for?
    • Historical growth rates:
      • Per year if possible
      • Over a 3-10 year period, depending on the nature of the market
      • Providing a CAGR (compound annual growth rate) for the period
    • Projected future growth rates:
      • Based on assumptions from industry experts with input from yourself/your client
      • Over a relevant time period
      • Including a CAGR
    • Use published data if available
      • Otherwise, you can use a similar approach to the market sizing estimates e.g. top-down or bottom-up assumption driven estimates
    • Use published data if available
      • Otherwise, use sensible estimates based on trends within the industry / market and/or historic figures and/or macro level figures e.g. growth will continue at same rate as last 10 years, or growth will continue at same rate as GDP
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • There are two methods to calculate growth – compound annual growth rate and average annual growth rate CAGR is a more sophisticated calculation and is used more widely than average annual growth rate. CAGR formula Average annual growth formula ( Last year – first year First year ) / n x 100 CAGR formula CAGR Average Annual Growth Rate THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ [ ( ( Last year First year ) 1/n-1 ) - 1 ] x 100 200 176 143 110 100 Size 5 4 3 2 1 Year [ ( ( 200 100 ) 1/5-1 ) - 1 ] x 100 = 18.9% ( 200 – 100 100 ) / 5 x 100 = 20.0%
  • 4. Company & Competitor Analysis
  • Company/competitor analysis – introduction What It Is Why We Use It
    • Provides a basic understanding of a company and its performance
    • Directs further analysis by highlighting key strengths and capabilities
    • Use of a common template can enable a comparison between players
    • Identify number, names and focus of players
    • Understand strategic positions (product/service offering, channel usage)
    • Identify strengths and weaknesses of different players in an industry
    • Identify gaps in portfolios and capabilities of client
    • Identify relative strength of client company
    • Understand key competitor moves
    Strengths & Limitations
    • Strengths:
      • Gives a clear overview of basic facts about a company:
        • Necessary to add insight to competitor or market analysis
      • Provides direction to further analysis
      • Efficient way to capture vital data on competitors
      • Gives overview of competitors’ attributes along multiple axes
    • Limitations:
      • May provide few insights in itself:
        • Requires benchmarking over time or against competitors
      • Often complex and difficult to use effectively in presentations:
        • Need to extract key messages and display using other tools
        • Requires effort to summarise
      • Often focuses on the present rather than the future:
        • Difficult to determine competitors’ strategic shifts
    • An assessment of a company’s own (or competitors) performance that should, at the least, include:
      • Background information:
        • Date founded
        • Overview of what the company does
        • Executive team
        • Vision statement
        • Ownership structure
      • Organisation structure:
        • Size of subsidiaries’ workforce
      • Key financials:
        • Current, historical, and projected, (see financial analysis)
      • Market positioning:
        • Market share, geographical markets, target customer segments
      • Channel usage:
        • Percentage through each, productivity
      • Product portfolio:
        • Main products
        • Price brackets
      • Relationship to industry value chain:
        • Key suppliers and customers
        • Distribution channels
      • Recent actions/moves – ”late breaking news”
      • Strategic issues and behaviour`
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Company/competitor analysis – how to do it Acquire a Basic Understanding of the Company/Industry
    • Read general information about the company on its Internet site
    • Read introduction to analysts’ company reports
    • Establish where it fits in the value chain
    Determine data needed
    • Ensure all necessary background information is included
    • Include information related to the strategic issue being examined by the project
    Gather and analyse data
    • There are a wide variety of sources available
    • Analyse data where appropriate:
      • Use financial analysis techniques
      • Product/channel analysis
    • Understand key trade-offs that competitors in an industry have:
      • e.g. niche vs scale
    Evaluate Company
    • Plot competitor field maps
    • Understand relative competitive positions and rationale:
      • Product/Service offerings
      • Channel usage
    • Depending on what we need to know, use SWOT model to help evaluate competitor
    • Ensure analysis relates to, or answers the questions, we are trying to answer
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Typical overviews focus on the angle your clients are most interested in, instead of strictly Porter’s Model
    • Possible required levels of analysis / examples:
    • Economic: What economic factors are key lead indicators of industry performance?
    • Industry: What is the structure / concentration of this industry?
    • Market: What are distinct customer preferences in different markets?
    • Company: What companies are the major drivers of this industry?
    • Corporate Functions: In what functions is excellence critical to success in this industry?
    • Products: Which products are the most important to this industry?
    • Individuals: Which individuals are viewed as industry leaders?
    • Technology: Is technological change driving this industry?
    • Other: Legal, environmental, etc.
    • Best-in-Shop examples:
    • Pulp and paper overview
    • Aluminum and steel overview
    • Tourism market viability analysis
    • Creating call centers
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Most overviews hit the basics and then go deeper into certain areas depending on the question Profitability Glaring issues Market share Players The basics: Customized detail: Size / growth 1. 2. 3. Case studies Market attractiveness Company profiles Trends / issues THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Company/competitor analysis – illustrative output Competitive Field Map Company Profile Template (Tailored to Specific Use) Competitive Field map 4: Multi-local vs Global Networked Islands Global Scale Local Scale BofA BofA Deutsche Deutsche HSBC HSBC Citibank Citibank Stan.Chart. Stan.Chart. • Asian Focu s ABN AMRO ABN AMRO • German-centric • Focus: European companies • Seeks domestic relationship s • Serve both local and cross-b order businesses well Chase Chase • Major money centre focu s; supplement ed with partn er banks BKB THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Is there business for GlobalCon in the pulp and paper industry? Contents of document
    • Present the key industry elements
      • Products
      • Producers
      • Customers
    • Highlight key trends and issues
      • Environmental challenges
      • Recycling discontinuity
      • Niche domination
    Deliverable “ Understanding the global pulp and paper industry” THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Is there business for GlobalCon in the aluminum and steel business in the United States? Contents of document
    • Objectives
    • Sources referenced
    • Introduction to the metals industry
    • The aluminum industry
      • U.S. in the world market
      • Value chain
      • Market players
    • The steel industry
      • U.S. in the world market
      • Value chain
      • Market players
    Deliverable “ Aluminum and steel: Two opportunities for DI/DS in the metals industry” THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Company/competitor analysis – top tips Potential Insights Hints and Pitfalls
    • Provides an overview of what the company is about, and an indication of success to date:
      • Directs further analysis
      • Drives insights when benchmarked against competitors (see competitor’s comparison)
    • Identifying competitors’ strengths and weaknesses helps us to understand threats and opportunities for our client
    • Must tie in with KSFs for industry
    • Do:
      • Use creativity in data gathering if information is not readily available
      • Ensure you use an 80/20 rule:
        • You can do much of the analysis very quickly, then fill only critical gaps after that
      • Gain basic knowledge about the company at a very early stage:
        • Obtain/produce an overview of the company’s activities
        • Pay particular attention to revenue
      • Check with your client if you have not used the client’s own data
      • Consider ‘outsourcing’ to shop or institute
      • Focus on major players if the market is highly fragmented,
      • Remember that competitors’ definition of segments often differ
      • Draft template early in the analysis process:
        • Use as a framework for data capture and to direct further analysis
      • Be clear about what information is necessary:
        • Keep in mind why you are conducting this analysis, and structure and collect data accordingly
      • Display findings to create an impact:
        • Use symbols and graphics to display the message
        • Shade the key findings on the template
    • Don’t:
      • Give unnecessary excessive detail:
        • Avoid including irrelevant data
      • Indulge in “data dumping”
      • Make template unnecessarily complex
      • Fail to include all relevant competitors
      • Take for given what the company says are its strengths:
        • May not be in reality
        • May be associated with corollary weaknesses
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Company/competitor analysis – data sources, case examples, and related analytics Data Sources
    • Annual report
    • Analysts’ reports
    • Internet sites
    • On-line searches
    • Internal company data (if available)
    • Interviews
    • Trade associations
    • Industry overview
    • Industry journals
    • Industry experts (internal and external)
    Related Analytics
    • Company/competitor analysis is often the centre-piece of strategic position assessment
    • However, it can be complemented and supplemented by the following analytics:
      • Financial analysis/ratios analysis
      • Porter’s five forces
      • SWOT
    • Scenario planning/war gaming
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • 5. PEST Analysis
  • PEST (Political, Economic, Socio-demographic and Technology) analysis – introduction What It Is Why We Use It Strengths & Limitations
    • An analytical framework that assesses the impact of four major forces that shape an industry, i.e.:
      • Political forces
      • Economic forces
      • Socio-demographic forces
      • Technology forces
    • The PEST framework:
      • Presents the characteristics of each of these forces (as well as their evolutions).
      • Explains how those forces affect:
        • Competitive environment (as described by Porter through his five forces – see related analytics).
        • Industry value chain.
        • Industry financials.
    • Complement other industry analysis frameworks.
    • Explain ongoing changes in the industry.
    • Strengths:
      • Deals with dimensions such as socio-demographics or policies that may be key to some industries.
    • Limitations:
      • Needs to be seen against how industries create value i.e. what are the industry CSFs
      • Better as a facilitative tool than analytic
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • PEST analysis – top tips Potential Insights
    • Reveals key trends and issues in the industry, e.g.:
      • Emerging/declining constraints.
      • New rules of the game.
    Hints and Pitfalls
    • Do:
      • Focus on the most significant aspect if you do not intend to deliver a thorough industry analysis.
    • Don’t:
      • Lose sight of factors that truly influence your clients’ business
    Data Sources
    • Analysts’ reports
    • Industry reports
    • Database searches
    • Industry experts
    Case Examples
    • The following documents contain good examples of PEST analysis and output:
    Related Analytics
    • Porter’s five forces
    • Value chain analysis
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • 6. Industry Attractiveness & Business Strength
  • The industry attractiveness / business strength matrix allows us to assess how well poised firms are for success
    • What it is
      • A matrix assessing the relative position of a company for success
      • A quantitative and qualitative method to calculate a company’s relative industry strength and then understand its position
    • Why we use it
      • To assess a company’s position and identify strategies for success
      • Combined with an analysis of a company’s competitiveness in each segment, it helps decide how best to distribute financial and managerial resources between segments
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • The industry attractiveness / business strength matrix highlights a firms capacity to grow within its industry Build pre-emptive position Exploit industry attractiveness Protect and focus Divest Challenge for industry leadership Preserve cash flow Expand selectively Harvest Match strength with opportunities
        • Middle
        • Middle
        • Industry attractiveness (from industry analysis)
        • High
        • Low
        • High
        • Low
        • Business strength (from capability assessment)
    Overall generic outputs
    • High attractiveness: invest grow / capture share
    • Medium attractiveness: manage current earnings
    • Low attractiveness: manage for cash return
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Creating the industry attractiveness / business strength matrix requires extensive industry information
    • Take care not to use a checklist regarding industry attractiveness blindly
    • Understanding how to use information/weight data where precise data is lacking – this is not a trivial exercise
    • Keeping in mind business units and products are not independent
    • Just using analysis as final conclusion
    Things to look out for
    • Isolate business units
    • Gather information affecting industry/business capabilities
    • Market factors
    • Competitive factors
    • Financial and economic factors
    • Technological factors
    • Socio-political factors
    • Determine attractiveness / business strength
    • Qualitative factors (identify method to measure)
    • Quantitative factors (assign weights)
    • Rate each factor (1: unattractive to 5:very attractive)
    • Multiply ratings by weightings
    • Calculate total value for each dimension
    • Plot Business unit / product
    • Forecast trends affecting industry attractiveness
    • Decide on strategy
    How to create 1. 2. 3. 4. 5. 6. 1. 2. 3. 4. THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • An illustration of defining segment attractiveness
    • Segment Evaluation
    Option A THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ Total 3.70 1.00 Must be acceptable Social / political / legal 0.15 5 0.05 Environmental impact 0.10 2 0.05 Energy requirements 0.15 3 0.05 Inflationary vulnerability 0.60 4 0.15 Technological requirements 0.30 2 0.15 Competitive intensity 0.60 4 0.15 Historical profit margin 1.00 5 0.20 Predicted customer demand 0.80 4 0.20 Overall market size Value (Factor x Score) Score Factor Weight Market Attractiveness
  • The industry maturity / competitive position matrix combines competitive position with the life cycle theory … … which then can assist in assessing a company’s strategy for success. Favourable Weak Tenable Strong Dominant Competitive position Ageing Mature Growth Embryonic Introduction Industry maturity/decline
    • Marketing:
      • Develop new products for new markets
    • Go overseas:
      • Export, license
    • Production rationalisation:
      • Standardise for lower costs
    • Efficient management:
      • Computerised production planning and inventory control
    • Harvest
      • Extract cash
    Generic outputs THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
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