Strategic ManagementBHRM 31124<br />R.A.IshankaChathurani<br />Lecturer (prob)<br />Department of Human Resource Managemen...
Environment Scanning - I(External Environment) <br />2. Industries and Sectors<br /><ul><li> Industry is a group of firms ...
Cont…Industries and Sectors<br />Supply led – where organizations start to behave as though there are linkages between the...
Sources of competition <br />Five forces framework helps identify the sources of competition in an industry or sector<br /...
Five forces<br />Threat of entry – forces that need to be overcome by new entrants if they are to compete successfully <br...
Cont… Five forces<br />Threat of substitute – Substitutes reduce demand for a particular “class” of products as customers ...
Cont… Five forces<br />Power of buyers<br />Concentration of buyers<br />Cost of switching<br />Supplier being acquired by...
Cont… Five forces<br />Power of suppliers<br />Concentration of suppliers<br />Switching cost<br />Suppliers competing dir...
Cont… Five forces <br />Competitive rivalry – Competitive rivals are organizations with similar products and services aime...
Interpreting Industry Analyses<br />UnattractiveIndustry<br />Suppliers and buyers have strong positions <br />    Low ent...
Interpreting Industry Analyses<br />High entry barriers<br />Suppliers and buyers have weak positions<br />             Fe...
3. Competitors and markets<br />An industry or sector may be a too general level to provide for a detailed understanding o...
Cont… Competitors and markets<br />Strategic customers – the person/s at which the strategy is primarily addressed because...
Critical Success Factors<br />Critical success factors are those product features that are particularly valued by a group ...
External Factor Evaluation Matrix (EFM)<br />EFM allows strategies to summarized and evaluate economic, social, cultural, ...
Cont… External Factor Evaluation Matrix <br />4 = the response is superior<br />3 = the response is above average<br />2 =...
Thanks for your participation!<br />
Strategic management 8
Upcoming SlideShare
Loading in …5
×

Strategic management 8

1,629 views

Published on

Published in: Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,629
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
22
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Strategic management 8

  1. 1. Strategic ManagementBHRM 31124<br />R.A.IshankaChathurani<br />Lecturer (prob)<br />Department of Human Resource Management<br />Faculty of Commerce & Management Studies<br />University of Kelaniya<br />
  2. 2. Environment Scanning - I(External Environment) <br />2. Industries and Sectors<br /><ul><li> Industry is a group of firms producing the same principle of product or more broadly a group of firms producing products that are close substitutes for each other</li></ul>Eg: <br /><ul><li>It is useful for managers in any organization to understand the competitive forces acting on and between organizations in the same industry or sector since this determine the attractiveness of that industry </li></li></ul><li>Cont…Industries and Sectors<br />Boundaries of an industry may be changing by convergence<br />Convergence is where previously separate industries being to overlap in terms of activities, technologies, products and customs<br />Convergence are two type<br />Supply led<br />Demand side<br />
  3. 3. Cont…Industries and Sectors<br />Supply led – where organizations start to behave as though there are linkages between the separate industries or sectors <br />Eg:<br />Demand side – where consumers start to behave as though industries have converged<br />Eg:<br />
  4. 4. Sources of competition <br />Five forces framework helps identify the sources of competition in an industry or sector<br />It must be used at the level of strategic business units level of the whole organization<br />Understand the connections between competitive forced and the key drivers in the macro environment is essential<br />The five forces are not independent of each other <br />
  5. 5. Five forces<br />Threat of entry – forces that need to be overcome by new entrants if they are to compete successfully <br />Economic of scale<br />The capital requirement of entry<br />Access to supply or distribution channels<br />Customer or supplier loyalty<br />Experience<br />Expected retaliation<br />Legislation or government actions<br />Differentiation<br />
  6. 6. Cont… Five forces<br />Threat of substitute – Substitutes reduce demand for a particular “class” of products as customers switch to the alterations. <br />Different forms of substitutions<br />Product –for product substitutions<br />Substitution of need<br />Generic substitution<br />
  7. 7. Cont… Five forces<br />Power of buyers<br />Concentration of buyers<br />Cost of switching<br />Supplier being acquired by buyers (Backward integration)<br />
  8. 8. Cont… Five forces<br />Power of suppliers<br />Concentration of suppliers<br />Switching cost<br />Suppliers competing directly with the buyers (Forward integration) <br />
  9. 9. Cont… Five forces <br />Competitive rivalry – Competitive rivals are organizations with similar products and services aimed at the same customer group<br />Factor affect the degree of competitive rivalry in an industry or sector<br />The extent to which competitors are in balance<br />Industry growth rate<br />High fixed costs in an industry<br />High exit barrier to an industry<br />Differentiation<br />
  10. 10. Interpreting Industry Analyses<br />UnattractiveIndustry<br />Suppliers and buyers have strong positions <br /> Low entry barriers<br /> Strong threats from substitute products<br /> Intense rivalry among competitors<br /> Low profit potential<br />
  11. 11. Interpreting Industry Analyses<br />High entry barriers<br />Suppliers and buyers have weak positions<br /> Few threats from substitute products<br />Moderate rivalry among competitors<br />High profit potential<br />AttractiveIndustry<br />
  12. 12. 3. Competitors and markets<br />An industry or sector may be a too general level to provide for a detailed understanding of competition <br />Strategic groups – Organizations within an industry with similar strategic characteristics, following similar strategies or competing on similar base <br />Market segmentation – group of customers who have similar need that are different from customer needs in other parts of the market<br />
  13. 13. Cont… Competitors and markets<br />Strategic customers – the person/s at which the strategy is primarily addressed because they have the most influence over which goods or services are purchased <br />
  14. 14. Critical Success Factors<br />Critical success factors are those product features that are particularly valued by a group of customers and therefore where the organization must excel to outperform competition <br />Examples for CSF<br />Threshold product features <br />Reputation of a product<br />After sales service<br />Delivery reliability<br />Technical quality <br />
  15. 15. External Factor Evaluation Matrix (EFM)<br />EFM allows strategies to summarized and evaluate economic, social, cultural, demographic, environmental, political, governmental, legal, technological and competitive information.<br />List key external; factors as identified in the external –audit process<br />Assign to each factor a weight that ranges from 0.0 to 1.0<br />Assign a 1 to 4 rating to each key external factor to indicate how effectively the firm’s current strategies respond to the factor,<br />
  16. 16. Cont… External Factor Evaluation Matrix <br />4 = the response is superior<br />3 = the response is above average<br />2 = the response is average<br />1 = the response is poor<br />4. Multiply each factor’s weight by its rating to determine a weighted score<br />5.Sum the weighted scores for each variable to determine the total weighted score for the organization <br />The average total weighted score is 2.5<br />
  17. 17. Thanks for your participation!<br />

×