INDUSTRY ANALYSIS IV
Toolkit <ul><li>Determinants of  industry attractiveness  </li></ul><ul><ul><li>#1. Economic Traits </li></ul></ul><ul><ul...
#1 Dominant Economic Traits <ul><li>Market Size </li></ul><ul><li>Scope of Competition </li></ul><ul><li>- Local  Regional...
Dominant Economic Traits <ul><li>Prevalence of Backward and Forward Linkage </li></ul><ul><li>Pace of Technological Change...
#2  Porter’s Five  Forces Substitute Products (of firms in other industries) Suppliers of Key Inputs Buyers Potential New ...
#3. Key Success Factors <ul><li>Technology: </li></ul><ul><ul><li>Product  Innovation Capability </li></ul></ul><ul><li>Pr...
KSF <ul><li>Distribution: </li></ul><ul><li>Low distribution cost </li></ul><ul><li>Company-owned retail outlets </li></ul...
KSF <ul><li>Skills: </li></ul><ul><li>Quality control know how </li></ul><ul><li>Design expertise </li></ul><ul><li>Expert...
KSF <ul><li>Others: </li></ul><ul><ul><li>Convenient Location </li></ul></ul><ul><li>Courteous Employees </li></ul><ul><li...
#4. Likely Strategic Moves by Rivals <ul><li>Strategic Intent: </li></ul><ul><li>Be dominant leader </li></ul><ul><li>Move...
Moves by Rivals <ul><li>Strategic Posture: </li></ul><ul><li>Mostly offensive </li></ul><ul><li>Mostly defensive </li></ul...
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Industry analysis 4

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Industry analysis 4

  1. 1. INDUSTRY ANALYSIS IV
  2. 2. Toolkit <ul><li>Determinants of industry attractiveness </li></ul><ul><ul><li>#1. Economic Traits </li></ul></ul><ul><ul><li>#2. Competitive Forces </li></ul></ul><ul><ul><li>#3. Key Success Factors </li></ul></ul><ul><ul><li>#4. Likely Moves by Rivals </li></ul></ul>
  3. 3. #1 Dominant Economic Traits <ul><li>Market Size </li></ul><ul><li>Scope of Competition </li></ul><ul><li>- Local Regional </li></ul><ul><li>- National Global </li></ul><ul><li>Industry Growth Cycle </li></ul><ul><li>- Early Takeoff </li></ul><ul><li>- Mature Stagnant </li></ul><ul><li>- Decline </li></ul>
  4. 4. Dominant Economic Traits <ul><li>Prevalence of Backward and Forward Linkage </li></ul><ul><li>Pace of Technological Change </li></ul><ul><li>Learning Curve Effect </li></ul><ul><li>Capital Requirement </li></ul><ul><li>Profitability (above/below par) </li></ul>
  5. 5. #2 Porter’s Five Forces Substitute Products (of firms in other industries) Suppliers of Key Inputs Buyers Potential New Entrants Rivalry Among Competing Sellers
  6. 6. #3. Key Success Factors <ul><li>Technology: </li></ul><ul><ul><li>Product Innovation Capability </li></ul></ul><ul><li>Production Process Innovation Capability </li></ul><ul><li>Expertise in given technology </li></ul><ul><li>Manufacturing : </li></ul><ul><ul><ul><li>Scale economy </li></ul></ul></ul><ul><ul><ul><li>Experience curve effect </li></ul></ul></ul><ul><li>High Labour Productivity </li></ul><ul><li>Flexibility to manufacture a range of products </li></ul>
  7. 7. KSF <ul><li>Distribution: </li></ul><ul><li>Low distribution cost </li></ul><ul><li>Company-owned retail outlets </li></ul><ul><li>Fast delivery </li></ul><ul><li>Marketing: </li></ul><ul><ul><li>Well-trained sales force </li></ul></ul><ul><li>Dependable service and technical assistance </li></ul><ul><li>Attractive styling/packaging </li></ul>
  8. 8. KSF <ul><li>Skills: </li></ul><ul><li>Quality control know how </li></ul><ul><li>Design expertise </li></ul><ul><li>Expertise in particular technology </li></ul><ul><li>Organization: </li></ul><ul><li>Superior Information System </li></ul><ul><li>Managerial know-how </li></ul><ul><li>Ability for quicker response to market </li></ul>
  9. 9. KSF <ul><li>Others: </li></ul><ul><ul><li>Convenient Location </li></ul></ul><ul><li>Courteous Employees </li></ul><ul><li>Patent Protection </li></ul>
  10. 10. #4. Likely Strategic Moves by Rivals <ul><li>Strategic Intent: </li></ul><ul><li>Be dominant leader </li></ul><ul><li>Move into top 5 </li></ul><ul><li>Maintain position </li></ul><ul><li>Market Objective: </li></ul><ul><li>Getting stronger, on the move </li></ul><ul><li>Well-entrenched, able to maintain position </li></ul><ul><li>All things to everybody </li></ul>
  11. 11. Moves by Rivals <ul><li>Strategic Posture: </li></ul><ul><li>Mostly offensive </li></ul><ul><li>Mostly defensive </li></ul><ul><li>Aggressive risk taker </li></ul><ul><li>Competitive Strategy: </li></ul><ul><li>Striving for low cost leadership </li></ul><ul><li>Mostly focusing on market niche </li></ul><ul><li>Pursuing differentiation </li></ul>

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