Lezione di strategia aziendale

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Lezione di strategia aziendale

  1. 1. University of Cagliari, Faculty of Economics, a.a. 2012-13Business Strategy and PolicyA course within the II level degree inManagerial Economicsyear II, semester I, 6 creditsLecturer:Dr Alberto Asqueraasquer@unica.itPhone: 070 6753399
  2. 2. Business Strategy and PolicyLecture 2Strategic positioning and the genericcompetitive strategies
  3. 3. Plan of this lecture1. The “Bain paradigm”2. The analysis of the industry: the 5 forces framework3. The analysis of the position of the competitors: strategic grouping4. Strategic positioning and the generic strategies5. Hybrid strategies- - - - - - - - - - - - -6. Summary
  4. 4. 1. The “Bain paradigm”The “Bain paradigm” refers to the theoretical approach for which:IndustrystructureIndustrialbehaviourFirmsperformanceaffects affects
  5. 5. 2. The analysis of the industry: the 5 forces frameworkMichael Porters (1980) theoretical framework for industry analysisInternal rivalryThreat ofsubstitutiveproductsThreat ofnew entrantsBargainingpower ofsuppliersBargainingpower ofclients
  6. 6. 2. The analysis of the industry: the 5 forces frameworkMichael Porters (1980) theoretical framework for industry analysisAssessment of the attractiveness of an industryInternal rivalryThreat ofsubstitutiveproductsThreat ofnew entrantsBargainingpower ofsuppliersBargainingpower ofclients
  7. 7. 2. The analysis of the industry: the 5 forces frameworkWhat are the effects of...High demand growth? Ease of market entry?High switching costs? High economies of scale?High brand preference and customer loyalty?Low regulatory restrictions?There are just a few large buyers?High learning or experience curves?Internal rivalryThreat ofsubstitutiveproductsThreat ofnew entrantsBargainingpower ofsuppliersBargainingpower ofclients
  8. 8. 2. The analysis of the industry: the 5 forces frameworkFor example, what is the attractiveness of the car industry?Demand growth? Ease of market entry?Switching costs? Economies of scale?Brand preference and customer loyalty?Regulatory restrictions?Are there just a few large buyers?Learning or experience curves?Internal rivalryThreat ofsubstitutiveproductsThreat ofnew entrantsBargainingpower ofsuppliersBargainingpower ofclients
  9. 9. 3. The analysis of the position of the competitorsCompetitors tend to form groups whose members share similarcompetitive approaches and behaviour in the market.The analysis of the position of the competitors results in a map ofstrategic groups.Groups can be formed along any out of several dimensions, like:pricing behaviour, quality of products, geographic coverage, degreeof vertical integration, product-line breath, distribution channels, typeof service, etc.Strategic groups can be represented into graphs!
  10. 10. 3. The analysis of the position of the competitorsExample: strategic group map of the automotive industryVariety of modelsPrice,performance,reputationGeneral Motors,FordNissan,Chrysler,MazdaToyotaHundai,SuzukiBMW,MercedesWolkswagen,Honda
  11. 11. 3. The analysis of the position of the competitorsExample: strategic group map of the automotive industryVariety of modelsPrice,performance,reputationGeneral Motors,FordNissan,Chrysler,MazdaToyotaWolkswagen,HondaHundai,SuzukiBMW,MercedesMore distance =less rivalry
  12. 12. 3. The analysis of the position of the competitorsExample: strategic group map of the automotive industryVariety of modelsPrice,performance,reputationGeneral Motors,FordNissan,Chrysler,MazdaToyotaHundai,SuzukiBMW,MercedesDifferent position= differentcompetitive pressures,different strategies,different profit potentialWolkswagen,Honda
  13. 13. Low-CostStrategyDifferentiationStrategyFocusStrategyHybridStrategies4. Strategic positioning and the generic strategiesLow-cost Differentiation
  14. 14. 4. Generic strategies: overall LOW COSTThe basis for sustained competitive advantage is lower costs thancompetitorsOne way is to perform value chain activities more cost-effectively thancompetitorsAnother way is to reconfigure the value system in such a way as tobypass or eliminate non-essential activities altogether
  15. 15. 4. Generic strategies: overall LOW COSTTypical actions to improve cost-efficiency of the value chain:Exploit economies of scale Use low-cost materialsClimb up the experience/learning curve Use online and other IT systemsOperate at full capacity Use labour-saving methodsBoost sales volumes Leverage on your bargaining powerImprove supply chain efficiency Outsourcing and vertical integration
  16. 16. 4. Generic strategies: overall LOW COSTTypical actions to reconfigure the value system:Bypassing intermediates and directly sell to customersReplace activities with faster and cheaper onesStreamline operations by eliminating activities that are not needed or deliver little valueRelocate facilities to save shipping (and sometimes labour costs)Simplify the product (no-frills)Narrow the product line
  17. 17. 4. Generic strategies: overall DIFFERENTIATIONThe basis for sustained competitive advantage is “being different” -possibly, in a way that is difficult to imitateSources of differentiation are found in:- Supply chain activities- R&D activities- Production and technology activities- Distribution activities- Marketing activitiesAnd differentiation works by making the product1) cheaper to use;2) better performing;3) better satisfy the consumer;4) faster to reach consumer.
  18. 18. 4. Generic strategies: FOCUSThe basis for sustained competitive advantage is the specialisation toserve the particular needs (solve the specific problems) of selectedtargets within the consumers marketThere are two variants:1) Focused low-cost strategy
  19. 19. 4. Generic strategies: FOCUSThe basis for sustained competitive advantage is the specialisation toserve the particular needs (solve the specific problems) of selectedtargets within the consumers groupThere are two variants:2) Focused differentiation strategy
  20. 20. 4. Strategic positioning in “Hybrid Strategies”The basis for sustained competitive advantage is the ability toincorporate attractive or upscale attributes at a lower cost thanrivals, i.e.,“Best Cost” strategyIts a middle ground, or hybrid, strategic approach that broadly seeksto combine low cost and differentiationThere may be the risk to be “stuck in the middle” (Porter, 1980)
  21. 21. 5. SummaryMain pointsThe 5-forces framework assists in analysing industry structure for thesake of assessment of the attractiveness of the industry.Competitors tend to form strategic groups that can be mapped.The generic strategies provide broad guidelines for formulating thedirection for the strategic management of firms.Low-cost, differentiation, and focus are the main generic strategies.Firms may also try to follow “hybrid” strategies.

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