The document discusses analyzing a firm's external environment. It emphasizes the importance of environmental scanning, monitoring, and competitive intelligence for developing forecasts of changes in the business environment. Scenario planning can help firms plan for unpredictable industries by outlining potential future scenarios. Both the general environment and competitive environment can impact a firm's strategy and performance. Forces in these environments may present opportunities or threats that a firm can address through strategic positioning.
overview on when to use environmental analysis; Assessment of the Internal factors of PANELCO III (management audit, functional departmental areas; organizational core values and illustration of S-W
This document provides guidance on implementing effective assessment methods for selecting a high-quality workforce. It discusses job analysis, different types of assessment methods including cognitive ability tests, work samples, integrity tests, and structured interviews. It provides criteria for evaluating assessment methods and additional considerations for ensuring legal defensibility and minimizing adverse impact. The goal is to help organizations make better selection decisions that result in improved productivity, cost savings, and decreased attrition through the use of scientifically validated assessment methods.
The document discusses environmental scanning, which involves examining and studying a business's internal and external environment to identify opportunities and threats. It identifies factors in the external environment like economic, demographic, technological, political, and cultural factors. The internal environment includes organizational resources, behavior, capabilities, and strengths/weaknesses. Several analysis tools are discussed, including Porter's Five Forces model, BCG matrix, Porter's generic strategies, and value chain analysis. Adaptive strategies mentioned include prospector, defender, analyzer, and reactor strategies.
The document discusses approaches to environmental scanning in strategic management. It defines environmental scanning as carefully monitoring an organization's internal and external environment to detect opportunities and threats that may influence plans. The objectives are to provide knowledge and insights for management planning and decision making. The main approaches covered are the systematic approach of collecting information continuously, the ad hoc approach of conducting special studies, and the processed form approach of using information from various sources.
Environmental scanning involves carefully monitoring an organization's internal and external environments to detect early signs of opportunities and threats that could impact current and future plans. The purpose is to provide knowledge and insights to inform strategic planning and decision-making. Environmental scanning identifies relevant external factors and their potential impact, allowing organizations to proactively respond to opportunities and threats. It provides a comprehensive view beyond isolated observations to help organizations survive, expand, or enter new markets. The strategic planning process involves defining objectives through environmental scanning, formulating strategies to meet objectives, implementing strategies, and evaluating progress to make adjustments.
Environmental Analysis is described as the process which examines all the components, internal or external, that has an influence on the performance of the organization.
Strategic management is the management of an organization’s resources to achieve its goals and objectives.
This document provides an overview of business environment analysis. It discusses what business environment analysis is, the stages and techniques involved, and the approaches used. Business environment analysis is a strategic tool that identifies internal and external factors affecting an organization to understand their impact. It helps align strategies with the firm's environment. The main techniques covered are PESTLE analysis, which examines political, economic, social, technological, legal and environmental factors, and SWOT analysis, which evaluates strengths, weaknesses, opportunities and threats. Understanding the business environment through analysis is important for organizational success and adapting to changes.
overview on when to use environmental analysis; Assessment of the Internal factors of PANELCO III (management audit, functional departmental areas; organizational core values and illustration of S-W
This document provides guidance on implementing effective assessment methods for selecting a high-quality workforce. It discusses job analysis, different types of assessment methods including cognitive ability tests, work samples, integrity tests, and structured interviews. It provides criteria for evaluating assessment methods and additional considerations for ensuring legal defensibility and minimizing adverse impact. The goal is to help organizations make better selection decisions that result in improved productivity, cost savings, and decreased attrition through the use of scientifically validated assessment methods.
The document discusses environmental scanning, which involves examining and studying a business's internal and external environment to identify opportunities and threats. It identifies factors in the external environment like economic, demographic, technological, political, and cultural factors. The internal environment includes organizational resources, behavior, capabilities, and strengths/weaknesses. Several analysis tools are discussed, including Porter's Five Forces model, BCG matrix, Porter's generic strategies, and value chain analysis. Adaptive strategies mentioned include prospector, defender, analyzer, and reactor strategies.
The document discusses approaches to environmental scanning in strategic management. It defines environmental scanning as carefully monitoring an organization's internal and external environment to detect opportunities and threats that may influence plans. The objectives are to provide knowledge and insights for management planning and decision making. The main approaches covered are the systematic approach of collecting information continuously, the ad hoc approach of conducting special studies, and the processed form approach of using information from various sources.
Environmental scanning involves carefully monitoring an organization's internal and external environments to detect early signs of opportunities and threats that could impact current and future plans. The purpose is to provide knowledge and insights to inform strategic planning and decision-making. Environmental scanning identifies relevant external factors and their potential impact, allowing organizations to proactively respond to opportunities and threats. It provides a comprehensive view beyond isolated observations to help organizations survive, expand, or enter new markets. The strategic planning process involves defining objectives through environmental scanning, formulating strategies to meet objectives, implementing strategies, and evaluating progress to make adjustments.
Environmental Analysis is described as the process which examines all the components, internal or external, that has an influence on the performance of the organization.
Strategic management is the management of an organization’s resources to achieve its goals and objectives.
This document provides an overview of business environment analysis. It discusses what business environment analysis is, the stages and techniques involved, and the approaches used. Business environment analysis is a strategic tool that identifies internal and external factors affecting an organization to understand their impact. It helps align strategies with the firm's environment. The main techniques covered are PESTLE analysis, which examines political, economic, social, technological, legal and environmental factors, and SWOT analysis, which evaluates strengths, weaknesses, opportunities and threats. Understanding the business environment through analysis is important for organizational success and adapting to changes.
This document discusses strategic management and environmental analysis. It covers internal and external environmental scanning techniques. Some key points include:
- Environmental scanning involves collecting and using information about internal and external factors like trends, patterns and relationships to help managers decide the organization's future path.
- Internal analysis looks at the organizational environment including employee and management interactions. External analysis considers the industry, national, and macroeconomic environments.
- Industry analysis examines past and future trends in an industry as well as competitors. Competitor analysis identifies competitors' strategies and evaluates their strengths and weaknesses.
- SWOT analysis is used to assess internal strengths and weaknesses as well as external opportunities and threats. It helps organizations build on strengths, reduce
The document discusses various aspects of organizational control, including:
1) It defines control and describes the three approaches to control systems - market, bureaucratic, and clan control.
2) It explains the three steps in the control process - measuring performance, comparing to standards, and taking action to correct deviations.
3) It discusses tools managers use to control organizational performance, such as financial ratios, balanced scorecards, benchmarking, and information controls.
This PPT covers Introduction of Operations research, Features, phases,Limitations of OR Travelling salesman problem, Assignment Problems, transportation Problems, Replacement Problems,EOQ,Inventory Control
Strategic Management Text And Cases 9th Edition Dess Test BankMendozaMaen
This document discusses concepts related to analyzing a firm's external environment. It provides examples to illustrate key points:
1) Environmental scanning and competitive intelligence are important inputs for forecasting. Ted Turner saw the potential of 24-hour news before others, demonstrating perceptual acuity.
2) SWOT analysis obliges firms to identify opportunities and threats to act proactively in choosing strategies. It emphasizes matching strategies to internal strengths/weaknesses and external opportunities/threats.
3) Sociocultural trends like more women working can impact industries - increasing business clothing demand but decreasing baking product demand. Technological innovations create new industries and alter existing ones.
This document discusses tools and concepts for conducting an external strategic management audit. It outlines five broad categories of external forces - economic, social/demographic, political/legal, technological, and competitive. The document describes the process of performing an external audit, which involves gathering information, identifying opportunities and threats, prioritizing key factors, and communicating findings. It provides examples of variables to monitor within each category and emphasizes the importance of competitive intelligence programs.
The document discusses concepts related to analyzing a company's external environment, including performing an external audit to identify key opportunities and threats in the general, industry, and competitive environments. It provides details on factors to consider in the economic, sociocultural, technological, legal/political, and competitive environments. Examples of tools for external analysis include the External Factor Evaluation Matrix (EFE) and Porter's Five Forces model for industry analysis.
Environmental analysis and strategic uncertainty'Vladimir Medina
The document discusses various dimensions of environmental analysis including technology, government, economics, culture, and demographics. It then covers dealing with strategic uncertainties through impact analysis and scenario analysis. Scenario analysis involves identifying scenarios, relating scenarios to existing strategies, and estimating scenario probabilities. Impact analysis assesses the impact and immediacy of strategic uncertainties to determine which require further monitoring and analysis.
This document outlines various frameworks and tools for strategic analysis, including:
1. External analysis including customer, competitor, market, and environmental analysis.
2. Internal analysis including performance and strategic option analysis.
3. SWOT analysis examining strengths, weaknesses, opportunities, and threats.
4. Porter's five forces model analyzing competitive rivalry, threat of new entrants, bargaining power of suppliers/buyers, and threat of substitutes.
5. PEST analysis of political, economic, social, and technological factors.
The document discusses strategic planning and the TOWS matrix. The TOWS matrix is a framework that helps match an organization's internal weaknesses and strengths with external threats and opportunities. It is used to develop four types of strategies: WT focuses on minimizing weaknesses and threats; WO aims to minimize weaknesses and maximize opportunities; ST attempts to use strengths against threats; and SO capitalizes on strengths to pursue opportunities. The TOWS matrix is a tool for systematically analyzing an organization's situation over time as external and internal environments are dynamic.
This document discusses strategic management and strategic planning processes. It begins by defining key terms like strategic management, strategy, and business models. It then outlines the six steps in the strategic management process: 1) identifying the organization's mission and goals, 2) external analysis, 3) internal analysis, 4) formulating strategies, 5) implementing strategies, and 6) evaluating results. It also describes three major corporate strategies - growth, stability, and renewal - and explains types of growth strategies like concentration, vertical/horizontal integration, and diversification. The BCG matrix and Porter's five forces model are introduced as tools for managing corporate strategies and assessing competitive advantage.
SMEs need strategy just as much as large organizations. Strategy provides direction and helps businesses compete and grow. While strategic planning can help plot a company's direction, the plan must have flexibility to adapt to changing market conditions. An effective strategy addresses questions about the business, its customers, and how it will excel. It also requires understanding internal strengths and weaknesses as well as external opportunities and threats through analysis.
This document discusses strategic environmental scanning and its impact on organizational performance. It analyzes two companies - Nestle Nigeria Plc and Cadbury Nigeria Plc - to understand this relationship. The findings show that 30% of variations in effective organizational performance and productivity are caused by variations in strategic environmental scanning and external environmental factors respectively. Thus, strategic environmental scanning helps companies identify opportunities to seize and threats to avoid, leading to improved profitability. The document recommends that organizations strategically and continuously scan their environment to stay aware of changing political, economic, social, technological and other external factors impacting their business.
The document discusses the decision stage of the quantitative strategic planning matrix (QSPM) strategy formulation framework. It provides details on the 6 steps to develop a QSPM, including listing key internal and external factors, assigning them weights, determining attractiveness scores for alternative strategies, and computing total and sum attractiveness scores. It notes the QSPM allows for objective evaluation of strategies while requiring good judgment. Limitations include reliance on assumptions while strengths are consideration of relevant external and internal factors.
This document provides an overview and analysis of a SWOT report submitted by Tsering Ngutuk Gurung for the MSc Infrastructure Engineering and Management program at the Pashchimanchal Campus Institute of Engineering in Pokhara, Nepal. The report defines SWOT analysis and discusses its benefits and limitations. It then provides a sample SWOT analysis of the MSc program, identifying strengths, weaknesses, opportunities, and threats. The conclusion emphasizes building on strengths, minimizing weaknesses, seizing opportunities, and nullifying threats to set an effective strategic vision and objectives for the program.
This document provides an introduction to strategic management. It defines strategic management as the process of formulating, implementing, and evaluating cross-functional decisions to achieve organizational objectives. The key steps in strategic management are environmental analysis, establishing organizational direction through a mission and objectives, strategy formulation, strategy implementation, and strategic control. The benefits of strategic management include taking a proactive approach to shaping the future, formulating better strategies through a systematic process, and improved financial and non-financial performance.
Chapter 6 Decision Making The Essence Of The Managers Job Ppt06D
The document discusses decision making and the decision making process for managers. It outlines 8 steps in the decision making process including identifying the problem, criteria, alternatives, analysis, selection, implementation, and evaluation. It also discusses rational decision making and biases managers may exhibit, such as overconfidence and anchoring effects. Finally, it provides guidelines for effective decision making including understanding cultural differences, using an effective process, and embracing complexity.
This document discusses strategic analysis and intuitive thinking. It defines strategic analysis as researching a business's environment and itself to formulate strategy. It explains tools for strategic analysis like PEST analysis, SWOT analysis, Porter's Five Forces, and value chain analysis. PEST analysis examines political, economic, social, and technological factors. SWOT analyzes strengths, weaknesses, opportunities, and threats. Intuitive thinking is decision making based on feelings and past experience rather than facts. Characteristics of intuitive leaders include seeing patterns, using analysis as support, sizing people up, and lifelong learning. Intuition can be improved by developing leader characteristics and practicing intuitive decision making.
This document outlines a framework for strategic analysis and choice. It describes a three-stage process for selecting strategies: 1) collecting internal and external audit data as inputs, 2) generating alternatives by matching key factors using tools like SWOT, SPACE, BCG, and IE matrices, and 3) evaluating and choosing among the alternatives. Several analytical tools are explained for completing stages 2 and 3, including how to develop and interpret the results of SWOT, SPACE, BCG, and IE matrices to inform strategic option selection.
The document provides information on strategic management and business policy case analysis. It discusses objectives of business policy, components generally included in business policy like marketing and finance. It also outlines guidelines for preparing case analysis, including focusing on facts, data, assumptions, and opinions. Additional topics covered include using SWOT analysis and evaluating internal and external environmental factors.
Mtm9 white paper macro-environmental (steep) analysisIntelCollab.com
This document provides an overview of macro-environmental (STEEP) analysis, which examines the external social, technological, economic, environmental, and political factors that influence an organization. STEEP analysis involves scanning these macro-level factors to identify opportunities and threats in order to understand the overall context surrounding an industry. The results of STEEP analysis provide insights into how these external forces could impact a company. While useful for strategic planning, challenges in applying STEEP analysis include difficulties interpreting factors, inaccuracies in forecasts, short-term orientations, and lack of acceptance by management.
This document discusses strategic management and environmental analysis. It covers internal and external environmental scanning techniques. Some key points include:
- Environmental scanning involves collecting and using information about internal and external factors like trends, patterns and relationships to help managers decide the organization's future path.
- Internal analysis looks at the organizational environment including employee and management interactions. External analysis considers the industry, national, and macroeconomic environments.
- Industry analysis examines past and future trends in an industry as well as competitors. Competitor analysis identifies competitors' strategies and evaluates their strengths and weaknesses.
- SWOT analysis is used to assess internal strengths and weaknesses as well as external opportunities and threats. It helps organizations build on strengths, reduce
The document discusses various aspects of organizational control, including:
1) It defines control and describes the three approaches to control systems - market, bureaucratic, and clan control.
2) It explains the three steps in the control process - measuring performance, comparing to standards, and taking action to correct deviations.
3) It discusses tools managers use to control organizational performance, such as financial ratios, balanced scorecards, benchmarking, and information controls.
This PPT covers Introduction of Operations research, Features, phases,Limitations of OR Travelling salesman problem, Assignment Problems, transportation Problems, Replacement Problems,EOQ,Inventory Control
Strategic Management Text And Cases 9th Edition Dess Test BankMendozaMaen
This document discusses concepts related to analyzing a firm's external environment. It provides examples to illustrate key points:
1) Environmental scanning and competitive intelligence are important inputs for forecasting. Ted Turner saw the potential of 24-hour news before others, demonstrating perceptual acuity.
2) SWOT analysis obliges firms to identify opportunities and threats to act proactively in choosing strategies. It emphasizes matching strategies to internal strengths/weaknesses and external opportunities/threats.
3) Sociocultural trends like more women working can impact industries - increasing business clothing demand but decreasing baking product demand. Technological innovations create new industries and alter existing ones.
This document discusses tools and concepts for conducting an external strategic management audit. It outlines five broad categories of external forces - economic, social/demographic, political/legal, technological, and competitive. The document describes the process of performing an external audit, which involves gathering information, identifying opportunities and threats, prioritizing key factors, and communicating findings. It provides examples of variables to monitor within each category and emphasizes the importance of competitive intelligence programs.
The document discusses concepts related to analyzing a company's external environment, including performing an external audit to identify key opportunities and threats in the general, industry, and competitive environments. It provides details on factors to consider in the economic, sociocultural, technological, legal/political, and competitive environments. Examples of tools for external analysis include the External Factor Evaluation Matrix (EFE) and Porter's Five Forces model for industry analysis.
Environmental analysis and strategic uncertainty'Vladimir Medina
The document discusses various dimensions of environmental analysis including technology, government, economics, culture, and demographics. It then covers dealing with strategic uncertainties through impact analysis and scenario analysis. Scenario analysis involves identifying scenarios, relating scenarios to existing strategies, and estimating scenario probabilities. Impact analysis assesses the impact and immediacy of strategic uncertainties to determine which require further monitoring and analysis.
This document outlines various frameworks and tools for strategic analysis, including:
1. External analysis including customer, competitor, market, and environmental analysis.
2. Internal analysis including performance and strategic option analysis.
3. SWOT analysis examining strengths, weaknesses, opportunities, and threats.
4. Porter's five forces model analyzing competitive rivalry, threat of new entrants, bargaining power of suppliers/buyers, and threat of substitutes.
5. PEST analysis of political, economic, social, and technological factors.
The document discusses strategic planning and the TOWS matrix. The TOWS matrix is a framework that helps match an organization's internal weaknesses and strengths with external threats and opportunities. It is used to develop four types of strategies: WT focuses on minimizing weaknesses and threats; WO aims to minimize weaknesses and maximize opportunities; ST attempts to use strengths against threats; and SO capitalizes on strengths to pursue opportunities. The TOWS matrix is a tool for systematically analyzing an organization's situation over time as external and internal environments are dynamic.
This document discusses strategic management and strategic planning processes. It begins by defining key terms like strategic management, strategy, and business models. It then outlines the six steps in the strategic management process: 1) identifying the organization's mission and goals, 2) external analysis, 3) internal analysis, 4) formulating strategies, 5) implementing strategies, and 6) evaluating results. It also describes three major corporate strategies - growth, stability, and renewal - and explains types of growth strategies like concentration, vertical/horizontal integration, and diversification. The BCG matrix and Porter's five forces model are introduced as tools for managing corporate strategies and assessing competitive advantage.
SMEs need strategy just as much as large organizations. Strategy provides direction and helps businesses compete and grow. While strategic planning can help plot a company's direction, the plan must have flexibility to adapt to changing market conditions. An effective strategy addresses questions about the business, its customers, and how it will excel. It also requires understanding internal strengths and weaknesses as well as external opportunities and threats through analysis.
This document discusses strategic environmental scanning and its impact on organizational performance. It analyzes two companies - Nestle Nigeria Plc and Cadbury Nigeria Plc - to understand this relationship. The findings show that 30% of variations in effective organizational performance and productivity are caused by variations in strategic environmental scanning and external environmental factors respectively. Thus, strategic environmental scanning helps companies identify opportunities to seize and threats to avoid, leading to improved profitability. The document recommends that organizations strategically and continuously scan their environment to stay aware of changing political, economic, social, technological and other external factors impacting their business.
The document discusses the decision stage of the quantitative strategic planning matrix (QSPM) strategy formulation framework. It provides details on the 6 steps to develop a QSPM, including listing key internal and external factors, assigning them weights, determining attractiveness scores for alternative strategies, and computing total and sum attractiveness scores. It notes the QSPM allows for objective evaluation of strategies while requiring good judgment. Limitations include reliance on assumptions while strengths are consideration of relevant external and internal factors.
This document provides an overview and analysis of a SWOT report submitted by Tsering Ngutuk Gurung for the MSc Infrastructure Engineering and Management program at the Pashchimanchal Campus Institute of Engineering in Pokhara, Nepal. The report defines SWOT analysis and discusses its benefits and limitations. It then provides a sample SWOT analysis of the MSc program, identifying strengths, weaknesses, opportunities, and threats. The conclusion emphasizes building on strengths, minimizing weaknesses, seizing opportunities, and nullifying threats to set an effective strategic vision and objectives for the program.
This document provides an introduction to strategic management. It defines strategic management as the process of formulating, implementing, and evaluating cross-functional decisions to achieve organizational objectives. The key steps in strategic management are environmental analysis, establishing organizational direction through a mission and objectives, strategy formulation, strategy implementation, and strategic control. The benefits of strategic management include taking a proactive approach to shaping the future, formulating better strategies through a systematic process, and improved financial and non-financial performance.
Chapter 6 Decision Making The Essence Of The Managers Job Ppt06D
The document discusses decision making and the decision making process for managers. It outlines 8 steps in the decision making process including identifying the problem, criteria, alternatives, analysis, selection, implementation, and evaluation. It also discusses rational decision making and biases managers may exhibit, such as overconfidence and anchoring effects. Finally, it provides guidelines for effective decision making including understanding cultural differences, using an effective process, and embracing complexity.
This document discusses strategic analysis and intuitive thinking. It defines strategic analysis as researching a business's environment and itself to formulate strategy. It explains tools for strategic analysis like PEST analysis, SWOT analysis, Porter's Five Forces, and value chain analysis. PEST analysis examines political, economic, social, and technological factors. SWOT analyzes strengths, weaknesses, opportunities, and threats. Intuitive thinking is decision making based on feelings and past experience rather than facts. Characteristics of intuitive leaders include seeing patterns, using analysis as support, sizing people up, and lifelong learning. Intuition can be improved by developing leader characteristics and practicing intuitive decision making.
This document outlines a framework for strategic analysis and choice. It describes a three-stage process for selecting strategies: 1) collecting internal and external audit data as inputs, 2) generating alternatives by matching key factors using tools like SWOT, SPACE, BCG, and IE matrices, and 3) evaluating and choosing among the alternatives. Several analytical tools are explained for completing stages 2 and 3, including how to develop and interpret the results of SWOT, SPACE, BCG, and IE matrices to inform strategic option selection.
The document provides information on strategic management and business policy case analysis. It discusses objectives of business policy, components generally included in business policy like marketing and finance. It also outlines guidelines for preparing case analysis, including focusing on facts, data, assumptions, and opinions. Additional topics covered include using SWOT analysis and evaluating internal and external environmental factors.
Mtm9 white paper macro-environmental (steep) analysisIntelCollab.com
This document provides an overview of macro-environmental (STEEP) analysis, which examines the external social, technological, economic, environmental, and political factors that influence an organization. STEEP analysis involves scanning these macro-level factors to identify opportunities and threats in order to understand the overall context surrounding an industry. The results of STEEP analysis provide insights into how these external forces could impact a company. While useful for strategic planning, challenges in applying STEEP analysis include difficulties interpreting factors, inaccuracies in forecasts, short-term orientations, and lack of acceptance by management.
The document discusses various topics related to strategic management, including environmental scanning, structural analysis, competitive forces, organizational structure, and components of strategies.
It defines environmental scanning as systematically surveying external opportunities and threats that could influence future decisions. It also discusses conducting an internal scan to examine organizational strengths and weaknesses. Porter's Five Forces model is explained as a framework to analyze industry competition and profitability.
The document also discusses different types of organizational structures and how structure should align with strategy. Finally, it lists some key components of strategies as goals, policies, action plans, and feedback mechanisms.
The document provides information on a course on corporate strategic planning taught by Dr. Phea Vanna. It includes Dr. Vanna's education and experience in strategic management. The course will cover strategic analysis, formulation, and implementation based on a textbook. Students will be evaluated based on attendance, assignments, exams, and a state examination. The document also provides an overview of strategic planning processes, including setting goals and objectives, environmental scanning, strategy formulation, implementation, and evaluation.
The document discusses various strategic analysis tools used to evaluate organizations and formulate business strategy, including PEST analysis, SWOT analysis, Porter's five forces model, value chain analysis, and scenario planning. It also covers the processes of strategic planning, formulation, implementation, and evaluation. These tools and processes are then applied in a case study analysis of the mobile network operator Ufone in Pakistan to assess its strengths, weaknesses, opportunities, threats, and overall strategic position.
This document provides an overview of business environment analysis and entrepreneurship. It defines business environment and discusses factors like internal environment, market environment, and macro environment. It also explains tools for analyzing business environment like PESTEL analysis and SWOT analysis. The document outlines key elements of developing an effective business plan including executive summary, company description, products/services, marketing plan, financial projections, and more. Overall, the document presents concepts and frameworks for understanding a business's external environment and internal strengths/weaknesses as tools for entrepreneurial planning.
1 1 1 Answers for theses question with little notes anAbbyWhyte974
1
1
1
Answers for theses question with little notes ant bullet point on power points. Two ppt is enough.
4.
Who supports the change? Who is resisting the change? Why?
5. What’s your communication objective? (Raise awareness, change behavior, change attitudes, build support, neutralize critics). Why?
Environmental Scanning for Google Inc. Introduction
Environmental scanning is a procedure that methodically inspects and interprets the relevant information to point out the external threats and opportunities that can influence future decisions. It is the consistent tracking of events, occurrences, and trends in the firm's internal and external environment that bear on its present and future endeavors. (Terry, 2020). Environmental scanning is related to SWOT analysis and should be integrated into the strategic planning process. An excellent environmental scanning process looks into both qualitative and quantitative changes. Ultimately, you should create a set of environmental indicators (external, internal, quantitative, and qualitative) that you think are the most important and could potentially impact the analysis you are performing.
The components of environmental scanning that should be analyzed include the following:
· Trends: What are the ongoing trends in the industry or marketplace that could impact your organization either positively or negatively.
· Competition: How are your competitors operating? What are they doing? Which of your competitor's weaknesses can you exploit?
· Technology: What are the developments in technology that could affect your business in the short or long term? Are there any existing technologies that could increase the efficiency of your organization?
· Customers: What is affecting your capability to offer top-notch customer service? How dynamic is your customer base?
· Economy: What is the present pattern of the economy, and how could it affect the future of the business?
· Labor Supply: How are the labor market and environment in your areas of operation?
How will you ensure there is ready access to workers with high demand?
· Academic interests: Employment interests and the famous fields of the prospective students together with their families.
· Research: Funding from private, governmental, and foundation sources and changes in
interests.
· Philanthropy: The changes in the available funding and donors' interests, attitudes, and approaches.
· Legislative/Political environment: Are there any impending legislation that will affect your business in the future? What impacts will the election results have on your organization?
("TOPPR", 2021A and "TOPPR", 2021B)
Every firm should identify the external factor with the most impact to make environmental scanning a helpful tool. The next step should be to perform an internal scan of the firm. Perform a review of the organization's mission, strategic plan, and vision. Examine the organization's weaknesses and strengths. Look at the ...
1
1
1
Answers for theses question with little notes ant bullet point on power points. Two ppt is enough.
4.
Who supports the change? Who is resisting the change? Why?
5. What’s your communication objective? (Raise awareness, change behavior, change attitudes, build support, neutralize critics). Why?
Environmental Scanning for Google Inc. Introduction
Environmental scanning is a procedure that methodically inspects and interprets the relevant information to point out the external threats and opportunities that can influence future decisions. It is the consistent tracking of events, occurrences, and trends in the firm's internal and external environment that bear on its present and future endeavors. (Terry, 2020). Environmental scanning is related to SWOT analysis and should be integrated into the strategic planning process. An excellent environmental scanning process looks into both qualitative and quantitative changes. Ultimately, you should create a set of environmental indicators (external, internal, quantitative, and qualitative) that you think are the most important and could potentially impact the analysis you are performing.
The components of environmental scanning that should be analyzed include the following:
· Trends: What are the ongoing trends in the industry or marketplace that could impact your organization either positively or negatively.
· Competition: How are your competitors operating? What are they doing? Which of your competitor's weaknesses can you exploit?
· Technology: What are the developments in technology that could affect your business in the short or long term? Are there any existing technologies that could increase the efficiency of your organization?
· Customers: What is affecting your capability to offer top-notch customer service? How dynamic is your customer base?
· Economy: What is the present pattern of the economy, and how could it affect the future of the business?
· Labor Supply: How are the labor market and environment in your areas of operation?
How will you ensure there is ready access to workers with high demand?
· Academic interests: Employment interests and the famous fields of the prospective students together with their families.
· Research: Funding from private, governmental, and foundation sources and changes in
interests.
· Philanthropy: The changes in the available funding and donors' interests, attitudes, and approaches.
· Legislative/Political environment: Are there any impending legislation that will affect your business in the future? What impacts will the election results have on your organization?
("TOPPR", 2021A and "TOPPR", 2021B)
Every firm should identify the external factor with the most impact to make environmental scanning a helpful tool. The next step should be to perform an internal scan of the firm. Perform a review of the organization's mission, strategic plan, and vision. Examine the organization's weaknesses and strengths. Look at the ...
Quiz 7QUIZ strategic management concepts &cases 11th edition by Fred R. David...حمد بوجرادة
This document provides answers to questions about conducting external analyses for strategic planning purposes. It discusses:
1) How to conduct an external audit with four basic steps: selecting key variables, sources of information, forecasting tools, and constructing an EFE matrix.
2) Recent economic, social, political, or technological trends that significantly affect financial institutions, such as interest rates, smoking ordinances, and internet usage.
3) That major opportunities and threats usually result from interactions among multiple environmental trends rather than single factors due to complex external environments.
Quiz 7QUIZ strategic management concepts &cases 11th edition by Fred حمد بوجرادة
This document provides answers to questions about conducting external analyses for strategic planning purposes. It discusses:
1) How to conduct an external audit with four basic steps: selecting key variables, sources of information, forecasting tools, and constructing an EFE matrix.
2) Recent economic, social, political, or technological trends that significantly affect financial institutions, such as interest rates, smoking ordinances, and internet usage.
3) That major opportunities and threats usually stem from interactions among multiple external factors rather than single events.
The document provides an overview of key topics related to business environment including:
- Internal and external factors that comprise the business environment
- Micro and macro environmental factors such as economic conditions, technology, competition, and regulations
- Tools for analyzing opportunities and threats like PEST analysis, SWOT analysis, and competitive indexes
- India's ranking in global competitiveness and the ranking of competitive cities within India based on factors like infrastructure and skilled workforce.
The document provides an overview of key topics related to business environment including economic factors, socio-cultural factors, technological factors, macroeconomic environment, financial environment, industrial environment, characteristics of business, Indian companies in the Fortune 500 list, government control, diversification strategies, globalization, nature of competition, business challenges, internal and external environment, micro and macro environment, economic and non-economic factors, tools for analyzing the environment like PEST analysis and SWOT analysis, relevance of WTO for Indian companies, and rankings of most competitive cities in India.
The document discusses strategic planning and provides an overview of tools and frameworks used for external and internal analysis as part of the strategic planning process. It describes conducting a PESTEL analysis to examine macroenvironmental factors and a Porter's Five Forces analysis to analyze industry competition. It also discusses performing internal analysis using value chain analysis and SWOT analysis to identify organizational strengths, weaknesses, opportunities, and threats. The document emphasizes that external and internal analysis are important for strategic planning to determine opportunities, threats, and developing effective business strategies that leverage an organization's strengths.
This document summarizes a workshop on monitoring and evaluation that took place in Tamale, Ghana from September 3-5, 2013. It defines monitoring as the ongoing collection and comparison of data to indicators to assess progress towards goals and use of funds. It discusses different levels that can be monitored, including outputs, outcomes and impact. Frameworks for monitoring like logical frameworks, results chains, theories of change and outcome mapping are also introduced. The document emphasizes that stakeholders at different levels must be engaged in monitoring and evaluation.
How Strategic Management Helps in the Accomplishments of Goals in an Organiza...www.assignmentdesk.co.uk
Strategic management plays a very vital role as it helps in the development and growth of an organization. It increases the market share and
productivity as well. Read this sample report to know more about strategic management and its theories.
The document provides an overview of various strategic management tools and matrix analyses that can be used for strategic planning. It discusses the external factor analysis summary (EFAS) table and internal factor analysis summary (IFAS) table for analyzing external opportunities/threats and internal strengths/weaknesses. It also covers other tools like STEEP/PESTEL analysis, Porter's five forces, value chain analysis, TOWS matrix, SPACE matrix, grand strategy matrix, BCG matrix, quantitative strategic planning matrix (QSPM). Examples are provided for many of these tools including EFAS, IFAS, TOWS matrix, industry matrix, SPACE matrix and QSPM. The document provides a comprehensive reference for strategic management methodology and matrix analyses
This document provides an overview of key concepts in strategic management including strategy, strategic positioning, strategic planning tools like SWOT analysis, competitive strategies, diversification strategies, and maintaining strategic control. It discusses Michael Porter's frameworks for strategic positioning and competitive advantage, the five forces model, grand strategies like growth, stability and defensive strategies, and the importance of execution in strategic management.
This document outlines the topics to be covered in chapters 3, 5, 6, 7, 9, and 10 of a strategic management course. It includes discussions of SWOT analysis, the value chain, resource-based theory, generic strategies, industry life cycles, diversification, international expansion, strategic control systems, organizational structure, and conducting case study analyses of markets. The case study section provides an example case analysis of the mineral water market in Cambodia, including market description, segmentation, demand projections, recommended marketing mix, and formulation of a market strategy.
This course syllabus outlines a corporate strategic planning course taught over 18 weeks. The course will cover topics including analyzing the external environment, formulating business and corporate level strategies, implementing strategies, and strategic control. Students will be assessed based on attendance, discipline, assignments, midterm exam, and final exam. Required reading includes textbooks on strategic management and assigned chapters will be supplemented with additional materials. The course is designed to help students integrate knowledge of strategic management and move firms toward achieving objectives.
This document discusses strategic control and corporate governance. It describes strategic control as consisting of informational control, which involves ongoing monitoring of the external environment and strategy, and behavioral control, which ensures employee behavior aligns with goals through culture, rewards and boundaries. Corporate governance aims to align manager and shareholder interests through internal mechanisms like boards of directors and executive compensation, and external mechanisms like markets and regulations. The key is balancing the interests of managers, who control firms, with shareholders, who own firms but are separated from control.
The document summarizes key concepts from Chapter 7 on international strategy, including:
1) The importance of international expansion as a diversification strategy and understanding sources of national advantage.
2) The motivations and risks associated with international expansion, including increasing market scope and reducing costs.
3) The two opposing forces of cost reduction and adaptation to local markets that firms face internationally.
4) The advantages and limitations of global, multidomestic, and transnational strategies, and the four basic entry strategies of exporting, licensing, strategic alliances, and wholly owned subsidiaries.
Corporate-level strategy concerns determining a firm's mix of businesses and how to manage them. Firms can create value through related and unrelated diversification. Related diversification seeks synergies by sharing resources between related businesses. Unrelated diversification creates value through corporate parenting and portfolio management. The success of diversification depends on managing business units for long-term competitive advantages and ensuring compatibility.
This chapter discusses business-level strategy and how firms can gain competitive advantage through strategies like overall cost leadership or differentiation. It describes three generic business-level strategies - overall cost leadership, differentiation, and focus. Firms can pursue a cost leadership strategy by efficiently performing value chain activities to achieve lower costs than competitors. They can also differentiate their products or services in ways that are valued by customers. The chapter outlines various approaches for achieving a cost advantage, such as controlling cost drivers, leveraging experience curve effects, and revamping the value chain. It emphasizes that success requires finding unique ways to lower costs that are difficult for rivals to copy.
This document provides an overview of assessing a firm's internal environment through analyzing its resources, capabilities, and value chain. It discusses:
- The benefits and limitations of SWOT analysis for conducting an internal analysis of a firm's strengths, weaknesses, opportunities, and threats.
- Porter's value chain framework for analyzing a firm's primary activities like operations, marketing, and service, as well as support activities like procurement, technology development, and human resource management. This can help identify relationships between activities to create a competitive advantage.
- Examples of tangible and intangible resources a firm can possess like patents, brand equity, and proprietary know-how. Organizational capabilities refer to effectively utilizing resources.
The impact of urbanization on socioeconomic& environmntal issuesDavinMon
Cambodia has experienced rapid urbanization over the last two decades, with its urban population growing from 15.7% in 1998 to 21.4% in 2013. This mostly unplanned urbanization has resulted in problems like lack of infrastructure, increased flooding, and neglect of the urban poor. While urbanization can promote development through economic and social opportunities, rapid unplanned urbanization can strain basic service provision and potentially harm the environment. Reliable data and understanding of urbanization processes are needed to develop effective policies and projects to manage urban growth in a way that minimizes threats and maximizes benefits.
This report explores the impact of urbanization on socio-economic and environmental issues in Cambodia. Due to population growth and rural-urban migration, Cambodia's urban population grew rapidly from 15.7% in 1998 to 21.4% in 2013. However, Cambodia's mostly unplanned urbanization process has resulted in several problems, including lack of infrastructure and services, increased traffic and flooding, and neglect of the urban poor and environment. While urbanization has benefits, it has also led to a growing urban poor population living in inadequate slums. There is a lack of research on the full socio-economic and environmental impacts of urbanization in Cambodia. The report reviews regulatory frameworks and interventions, identifying challenges to advancing more inclusive and sustainable urban
Competitive intelligence involves gathering quantitative market information through various legal methods to inform business planning and strategy. This includes collecting government statistics, annual reports, trade publications, and SEC filings to analyze the current market, identify opportunities and threats, track technology and market changes, and find important industry players. It also involves envisioning competitors' responses and presenting findings visually to managers through tools like PowerPoint. Ethics require avoiding deception while information from public sources or third parties is fair to collect.
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1. Chapter Two
Analyzing the ExternalAnalyzing the External
Environment of the Firm(EE)Environment of the Firm(EE)
2. Learning
Objectives
• The importance of developing forecasts of the business environment.
Why environmental scanning, monitoring, and collecting
competitive intelligence are critical inputs to ForecastingForecasting.
Why scenario planningscenario planning is a useful technique for firms competing in industries
characterized by unpredictability and change.
• The impact of the general environmentThe impact of the general environment on a firm’s strategies andstrategies and
performance.performance.
• How forces in the competitive environmentcompetitive environment can affect profitabilityprofitability
How a firm can improve its competitive position by increasing its power vis-à-vispower vis-à-vis
forcesforces in the competitive environment.
The concept of strategic groups and their strategy and
performance implications._ the basis of similarities in their
resources and strategies (!)
How trends and events in the general environment and forces in the
competitive environment are interrelated and affect performance.
After studying this chapter, you should have
a good understanding of:
TRANSPARENCY-12
3. • The concept ofThe concept of strategic groupsstrategic groups is also very important tois also very important to
thethe external environment of a firm.. E.g.,Two organizations are
completely different nor are they exactly the same. The question
is How to group firms (see into slide#6-7) in an industry on the basis
of similarities in their resources and strategies:
The strategic groups concept is valuable for determining mobility
barriers across groups that represents the greatest opportunity. (e.g.,
increase its market share… , see into footnote)
Identifying groups with marginal competitive advantage {strategic
position :C or D } :Identify factors that prevent firms in one groups from
competing with companies in other groups ; Identify the strategic group that
represents the greatest opportunity & Recognize group’s strengths and
weaknesses).
Charting the future directions of firm strategies (Merge,
Join venture or alliance)_overall goals(see into footnote & slide #6)
And assessing the consequences of industry trends for the strategic
group as a whole(Evaluate the degree of rivalry between groups) . e.g.,
Starcell ,Smart& Hello group._ expandingexpanding a firm’s product-market scope.
Dr. Phea Vanna 2015
Chapter Summary (Cont.)
5. Scanning( Theoretical )
Surveillance of environment conclusion:
– Anticipate (expected)future changes(Predict thePredict the events&
trends ) and detect (notice) changes under way
– Recognize patterns ( Strategy & Structures _ strengths and weaknesses ) before
competition
– Act before changes occur (proactive) rather than
responding afterwards (reactive)
– General top of the mind awarenessmind awareness of societal
behaviors and businessbusiness practices : specific Trend &
Event changes in socio-cultural segment.
e.g., Cambodian Business climate "The price
sensitive Cambodian Consumers "
Dr. Phea Vanna 2012
6. Environmental Scanning(Practice)
e.g., Cambodian poverty : "The price sensitive Cambodian Consumers "
•Data Profession(WB_ lower & upper line poverty in 2011(relist
2013)=11,1mln persons(85%_ income=$1.25 to $2.3/per day))
•Data Providers(producers and distributors_ Camgov-t statistic,2013) _
wealth ranking lower & upper line poverty=51.2%/100persons
•Educational Sector_ According to UNESCO, only 1.6% of Cambodia’s
GDP is spent on education – ranking around 170th in the world. Education statistics
are improving but still low according to world standards.
•Research Community
ASEAN (2011-2012)_less than $2 (57.8%) (ASEAN =lower P=100m & upper P =200m persons)
Camgov-t statistic(2010)_Nutrition= 55%( 5> 40% )
Cam-ladies (age 15 to 49 year old)= 44%() &57.1%`()
Camgov-t statistic_child(6 to 14 year old)=45% (contribute economic activity) &(16%_child
labour )
Poverty rate between 24.6%rural & 19.3% other urban areas in Cambodia(12.8% PP),2013
•External Factors (larger societal issues _ Source UNFPA (2013)_
Cam-immigrant to Thai =81%(95% illegal immigrant)
7. Business Environment Indicators, 2014
Country Cost to
Export
Ease of Doing
Legal Rights
Index
Labor Tax Total Tax RateBusiness Rank (0 = weak to
($ per container) (1 = business-friendly) 11 = strong) (% of comm. profits) (% of comm. profits)
Brunei
Darussalam 705 101 4 7.9 15.8
Cambodia 795 135 11 0.5 21
Indonesia 572 114 4 11.3 31.4
Lao PDR 1,950 148 4 5.6 25.8
Malaysia 525 18 7 16.4 39.2
Myanmar 620 177 2 0 47.7
Philippines 755 95 3 8 42.5
Singapore 460 1 8 15.1 18.4
Thailand 595 26 3 4.3 26.9
Viet Nam 610 78 7 23.7 40.8
Sources: World Bank. 2014. Cambodia: Doing Business 2015. Washington, DC.; and World Bank, World Development Indicators, accessed September 2015.
8. Monitoring
• Tracking movement or changes in specific
trends, sequences of events, or streams of activities
• Watching specific formal and informal
indicators of future events:
Index of economic indicators(Consumer price Index, Interest
rates(credit & loan)& Exchange rate(PPP) , Unemployment(Cam-
labour flow into Cam-market 300000 person /year: only 50000
had Job vacancies(JV) and 250000 person have no JV=83%) ,
Trends in GDP(sectors contribute to GDP) & Changes in stock
market valuations (involves the inclusion of multiple stakeholders in
decision making): Economic factors affect the purchasingEconomic factors affect the purchasing
power of potential customers and the firm's cost ofpower of potential customers and the firm's cost of
capital.capital. (see into Economic segment).
Dr. Phea Vanna 2015
9. Summary(CI)
Competitive intelligence should be critical to business planning
(Understanding the process is critical _the need ,idea, solution &result):
The Need(number of competitors, market prices and Win rate)
The Idea(Strategic planning)
The Solution(alternatives) with CBA
The Result( Balancing ,preparing and strategic actions )
Sometimes you can get support to build an organization that
does this regularly scanning and monitoring for useful information
(So, CI Unit need to takes time, patience, and thought)
It uses many of the skills involved in other information-
hunting activities.
Historically, the problem has been that the people who do it
are “strategic planners” and not called “librarians”.
So, CI _ information hunting that helps managers determine how to compete better.
10. Environmental
Scanning
Environmental
Monitoring
( Macro-
environment )
Competitive
Intelligence
(Micro-
environment& IA)
Forecasts
Exhibit 2.0
TRANSPARENCY-117
surveillancesurveillance of firm’sof firm’s
external & Internal factor s ,external & Internal factor s ,
research community,research community,
educational sector,educational sector,
technology , data providerstechnology , data providers
(producers& distributors)&(producers& distributors)&
data professiondata profession __ trends &trends &
events toevents to predictpredict env-tenv-t
changes andchanges and findfind changeschanges
already under way.already under way.
Tracking movement orTracking movement or
changes inchanges in specificspecific
trends & sequences oftrends & sequences of
events or streams ofevents or streams of
activities_ (activities_ (PEST& IAPEST& IA))
CICI should be critical toshould be critical to
corporate strategiccorporate strategic
planning (theplanning (the NeedNeed
,Idea, Solution &Result):,Idea, Solution &Result):
Finding out informationFinding out information
for business planningfor business planning
InformationInformation
asymmetry(see intoasymmetry(see into
footnoted)footnoted)
Chapter 2.Dr. Phea Vanna 2016
EF_ Scenario development describes aEF_ Scenario development describes a
particular set of future conditionsparticular set of future conditions::
Best(15%) ,Worst(5%) & Base(10%)-case scenarios
Involved human judgment (experts assessment)
combined with quantitative analysis(STEP&I A )
to get the information needed to forecast future
issues(OT).
Help managers develop contingency plans_ methods
for predicting how variables will change in the future.
The importance of developing forecasts of the
business environment.
11. The general environment(GE)
• External factors have profound influence on
firm outcomes and entireoutcomes and entire industries
– Macro-affectsMacro-affects different industries differently
{P, N & neutral impact :e.g., Global economic crisis,2008_ China (GDP=
9%, 2009) & Laos(Inflation_4-5%),but Cam, Thai & VN _(Inf_25 to 30%),
USA (Unem-t_10%, = 4.4mln ,2010) ,Japan & South Korea (BOP_ deficit
= - 3% ,1quarter, 2009),…}
The technique requirement of GE are six segment
(OT, see into footnote): Demographic, Socio-cultural,
Political/legal, Technological, Economic and
Global. So, those segments analysis may reveal certain new
opportunities for profit and growth and also may present threats
to the firm.
Dr. Phea Vanna 2013
12. G E_ Key trends and eventsG E_ Key trends and events may impact on a firm’s strategies andmay impact on a firm’s strategies and
tactical performancetactical performance..
Exhibit 2.2
DemographicDemographic
– Changes in ethnic composition
– Geographic distribution of population
– Greater disparities in income levels
Socio-cultural factorsSocio-cultural factors include the demographic and culturaldemographic and cultural
aspectsaspects . These factors affect customer needs and the size of potential marketsThese factors affect customer needs and the size of potential markets.
Some social factors include: Health consciousness, population growth rate , ageHealth consciousness, population growth rate , age
distribution, career attitudes and emphasis on safetydistribution, career attitudes and emphasis on safety
Political/LegalPolitical/Legal factors include government regulations and
legal issues and define both formal and informal rules under which
the firm must operate. Some examples include_ Industryndustry
Development Policy in Cambodia 2015 to 2025:Development Policy in Cambodia 2015 to 2025:
• tax policytax policy
• employment lawsemployment laws
• environmental regulationsenvironmental regulations
• trade restrictions and tariffstrade restrictions and tariffs
• political stability ( e.g., China policy )political stability ( e.g., China policy )
TRANSPARENCY-122
Chapter 2.Dr. Phea Vanna 2014
13. GE continueGE continueExhibit 2.2
• Economic factorsEconomic factors affect the purchasing power of potential customers andffect the purchasing power of potential customers and
the firm's cost of capital.the firm's cost of capital. The following are examples of factors in the macro-
economy: economic growth, interest rates ,exchange rates, and inflation
rate.
CPI (Cam-Inflation: 3.5 in 2014-2015) see into next slide 37
Interest rates (Cambodia:loan_12%& deposit_9.75%)
Unemployment{(Cam-labour flow into Cam-market 300000
person /year: only 50000 had Job vacancies(JV) and 250000 person
have no JV=83%)}.Cam-immigrant to Thai =81%(95% illegal
immigrant _ UNFPA (2013). see into next slide 38
Trends in CamGDP,2013_7.2%: 24% Industry sector contributed to
GDP,( during 1998 to 2013 increased at an average 12.4%,
compared to agriculture sector4.7% and services sector8.5%) and
GDP_2014&2015: 7% &7.3%}.See : Slides 38 to 42 for detail.
Changes in stock market valuations(stock market is the best
choice for long term gather financial investment).
TRANSPARENCY-123
14. GE continueGE continueExhibit 2.2
•Technological factorsTechnological factors can lower barriers to entry, reduce minimum
efficient production levels, and influence outsourcing decisions. SomeSome
technological factors includetechnological factors include:(R&D activity , automation, technology incentive andR&D activity , automation, technology incentive and
rate of technological changerate of technological change):
– Genetic engineering(Toyota’s Hybrid technologies)
– Emergence of Internet technology(e.g., Face book, Skype.)
– Computer Aided Design/Computer-Aided man-ring Sys.
– Pollution/Global warming( Petroleum & solar green house)
TRANSPARENCY-124
•Global factorsGlobal factors (( Standardization leads to higher economies of scale, which
lowers costs , but limited ability to adapt to local markets):
– Increasing Global trade(Strong integration across various bus-es);
– Currency Exchange Rates(Trade off : Cambodia & Thai )
– Emergence of the BRICS_ Brazil, Russia, India,China &South
Africa _ the most important emerging economies with large potential
markets.
– Trade Agreements among regional blocs (e.g. WTO, EU &
ASIAN _ leading to decreasing costume tariffs)
15. Demographic segment
• Numerical measurement of characteristics of a population:
Rising affluence(.e.g., Cambodia's natural & traditional resources ) & Changes in
ethnic composition.(e.g., Cam_ Khmer 90%, and aboriginal and other :Vietnamese 5%,
Chinese 1%, other 4%)
• Literally(really)description of people: (development)
aging population(e.g. Cam,0-14 years: 32% ;15-64 years:64% ;65 years and
over : 3.9%)_July 2012 est.); Life expectancy at birth total population:68.9 years:See into
Next slide#29 (NIS,2012).Cam: More than 50% of the population is less than 25 years old
(15-64 years labor force participation rate : Urban 73.2% & Rural 84.8%)
geographic distribution of population(see into next slide#26 _ urban
population: Cambodia has experienced rapid urbanization over the last two decades
when the urban population grewurban population grew from 15.7%15.7% in 1998 toin 1998 to 21.4%21.4% in 2013in 2013.( From
2,614,027 (19.5%) of the total population in 2008, the urban population rose to
3,146,212 (21.4%) in 2013 (NIS, 2012, 2013a). In 2011, out of 1,633 (2000)communes or
Sangkats in Cambodia,). By 2013, about 25%(3,705,253 people ) of the Cambodian
population had migrated andmigrated and 85% of the urban85% of the urban migrantsmigrants came fromcame from rural areasrural areas..
greater disparities in income levels (e.g., Poverty rate between 24.6%rural & 19.3%
other urban areas in Cam (12.8% PP): Approximately 4 million people live on less
than $1.25 per day, and ASEAN(2011-2012)_less than $2 (57.8%=8.7mln).Next slide#27
Dr. Phea Vanna 2015
16. Cambodian Poverty Measures
Source: World Bank, World Development Indicators, accessed September 2015.
Poverty Measure
Cambodian Poverty
Measures, 2004 and
2007–2012 (%)
2004 2007 2008 2009 2010 2011 2012
Poverty headcount ratio at $1.25 a day
(PPP)
32.8 30.8 20.9 12.9 11.3 10.1 ...
Poverty headcount ratio at $2 a day
(PPP)
64.4 59.4 51.1 40.7 40.9 41.3 ...
Poverty headcount ratio at national
poverty lines (PPP)
50.2 45 34 23.9 22.1 20.5 17.7
Rural poverty headcount ratio at
national poverty lines (PPP)
54.2 51.4 38.5 27.5 25.3 23.6 20.8
Urban poverty headcount ratio at
national poverty lines (PPP)
28.5 18.3 15.1 8 8.5 8.7 6.4
18. Urban-rural areas- key demographic data
Description National
average
Urban areas Rural areas
Household size 4.6 4.8 4.6
% of HH using electricity as main source of light 48 94 36
% of HH accessible to improved sources of% of HH accessible to improved sources of
water (water (see into next slides _30-31see into next slides _30-31))
5757 81.881.8 5050
% of HH having toilet facility with premises 48.7 87.5 38.5
Adult literacy rate (aged 15+) 79.7 90.3 76.5
Labor force participation rate (aged 15-64yrs) 82.2 73.2 84.8
Unemployment rate (aged 15-64yrs) 2.3 4.4 1.8
% of migrant by place of last residence 28.9 49.4 23.3
Total fertility rate per 1,000 live births 2.8 2.1 3.1
Infant mortality rate per 1,000 live births 33 9 38
Under-5 mortality rate per 1,000 live births 53 15 60
Life expectancy at birth 68.9 76.8 67.6
Dr. Phea Vanna 2015
19. Main sources of drinking water in Cambodia (wet and dry
season)
Source: NIS and www.rdic.org
HH accessible to improved/unimproved sources of water :
In 2014, about 51 percent of the households in Cambodia had a “safe/improved water
source” in the wet season and about 58 percent in dry season. One of the differences
between wet (49% ) and dry season (42% ) is that a higher share of the households have
access to unimproved rainwater in wet season.
20. Drinking water source for the Urban-rural
areas
Description National
average
PP Urban
areas
Rural areas
Number of households 3,261,000 369,000 366,000 2,526,000
HH accessible to improved sources of
water (%)
57 93.3 81.8 50
Treatment of drinking water(%) 70.8 90 75.8 67.2
Source: Cambodia Socio-economic Survey, NIS, 2014
The HH accessible to improved sources shows that improved drinking water source for the
urban areas had increased from 78 percent of households in 2009 to 81 percent in 2014. For
rural areas, improved drinking water source had increased from 42 percent of households in
2009 to 47 percent in 2014.
As observed, Treatment of drinking water shows that the tendency was towards increased
from 53 percent of households in 2004 to 60 percent in 2009 and 71 percent(in 2014.) of the
Cambodian households said that they always treat water for drinking :
10 percent of households said that they sometimes treated water for drinking
and 19 percent of households never treated their drinking water. However, the households
that had always treated drinking water over two five-year periods in Cambodia.
21. Conclusion: Urbanization is strongly associated with progress and development
Urban spaces are gateway to global and regional economic networks that facilitate as well
as promote transnational trade and investment:
Well-planned and inclusive urbanization processes produce many socio-economic and
environmental benefits (Opportunity): reduced infant and maternal mortality rate, increased
literacy rate(80%) and overall welfare of the population, better service delivery, minimizing
environmental degradation, and above all reducing poverty from 47.8% in 2007 to 19.8% in
2011).See into footnoted
Urbanization necessarily involves social, economic, and environmental changes(Threats).
Depending on the quality of their management, these changes can be beneficial or
detrimental. Rapid but unplanned urbanization strains the capacity of national and sub-
national governments to provide even the most basic services (i.e., health care, education,
clean water, electricity, sanitation facilities, sewerage.
Reliable data on current urbanization processes and problems are
essential to inform the development of urbanization projects and regulatory
framework and is essential for the formulation of national policies,
strategies, and programs responsive to the diverse needs of and addressing
challenges faced by the target population.).
Dr. Phea Vanna 2015
22. Socio-cultural segment• Distinct from(individual of social nations ), but related to demographics
Values, beliefs, attitudes of a social behavior(slide#36):
– Increase in temporary workers _ ValuesValues ((Cam labor force_ 7.9m (82%)
,2011-13 est.): agriculture_55.8%, industry _16.9% ,services _27.3%.
In 1993, 72% agriculture sector and only 5% industry sector. Industry sector is the main
fundamental of creating jobs: 2008 census founded rose to 8.6%(600000 workers) of totally workers and 2012
in this sector increase to18.6%(1.4 million workers), but in hot season rose to 25.2%(1.8 million
workers): Industries labor force participation rate (Garment _50%, 25% construction, 10% food
processing industries & beverage, and 13% some other manufactories, socio-
economic2007-2012 )
Scale of manufactory:( location:PP:68%, Candal :13% & other provinces :12%)
Micro- factory (1to 10 workers): 97% (69,851 factories), labor force: 29.3%(162,335 workers) and
capital investment:12%(396mln).(99% local investment)
Small factory (11to 50 workers): 1.9% (5,861 factories), labor force: 5.2%(28,706 workers) and
capital investment: 9.1%(300mln). (94% local investment)
Medium factory (51to 100 workers): 0.2% (530 factories), labor force: 2.2%(11,949 workers) and
capital investment:2.9%(94.4mln). (37.14% foreign investment)
Large factory (100+ workers): 0.6% (609 factories), labor force: 63.3%(350,260 workers) and
capital investment:76%(2,500mln).(63% foreign investment)
Conclusion: Industry structure depend on entire big factories, if uncertainty envi-t easily impact
to labor market ,economic growth and down competitive power(no support from SME: change operating cost).
Dr. Phea Vanna 2015
23. ASEAN Social Indicators
36
Country
Total Land
Area (km2)
Total Pop
(thousands)
Poverty
$1.25$1.25(
%) 2012
Poverty
$2(%)
2012
Rural
Pop(%)
Life Exp
2013
Literacy
(%)
2012
Employm
ent(%)
2013
Labor
force(%)
(2013)
Age
dep(%)201
4
Brunei 5,270 423 …. .… 23.1 78.6 95.4 61.6 64 38.3
Cambodia 176,520 15,408
10.1
(2011)
41.3
(2011)
79.5 71.7
73.9
(2009)
82.3 82.5 55.8
Indonesia 1,811,570 252,812
16.2
(2011)
43.3
(2011)
47 70.8
92.8
(2011)
63.5 67.7 49.5
Lao PDR 230,800 6,894 30.3 62 62.4 68.2
72.7
(2005)
76.6 77.7 63.6
Malaysia 328,550 30,188 0.0 (2009) 2.3 (2009) 26 75
93.1
(2010)
57.5 59.4 44.2
Myanmar 653,290 53,719 .… .… 66.4 65.1 92.6 75.9 78.6 49.9
Philippines 298,170 100,096 19 41.7 55.5 68.7
95.4
(2008)
60.6 65.2 58
Singapore 700 5,470 .… .… .… 82.3 96.4 65.9 67.8 36.9
Thailand 510,890 67,223 0.3 (2011) 3.5 (2010) 50.8 74.4
96.4
(2010)
71.7 72.3 39
Viet Nam 310,070 90,730 2.4 12.5 67 75.8
93.5
(2009)
75.9 77.5 42.3
ASEAN 4,325,830 622,964
Age dependency is the proportion of dependents (people younger than 15 or older than 64) per 100 working-age population (those ages 15–64).
Source: World Bank, World Development Indicators, accessed September 2015.Note_ Poverty $3(70%) ,2014
24. Why Do Business in Cambodia? Cambodian Investment Board 37
Efficient Infrastructure/Strategic Location
37
.
Phnom Penh
The Philippines
Singapore
Indonesia
Myanmar
Southern China
Manila
Bangkok
Kunming
Yangon
Brunei
Jakarta
Begawan
Hanoi
Laos
o Vientiane
CAMBODIA(15mln: 9.6mln(82.5%) workers )
Malaysia
Kuala Lumpur
Thailand
Vietnam
37
StrategiclocationinSouth-EastAsia
Socio-culturall include the demographic
and cultural aspects .(623mln): More
women(58.5%) in the workforce(e.g., career
attitudes in Cam: 32.2% Garment,
23.4%small business, 11.1% domestic work
&10.3% service/entertainment) & Increase in
temporary workers (ASIAN _280mln):
examples of such opportunitiesexamples of such opportunities
include:
an unfulfilled customer need
Some examples of such threatsSome examples of such threats
include:
shifts in consumer tastes away from
the firm's products
emergence of substitute products
Some social factors include: Health consciousness, population growth
rate , age distribution, career attitudes and emphasis on safety. These
factors affect customer needs and the size of potential markets.
25. G E: Key trends and eventsG E: Key trends and events may impact on a firm’smay impact on a firm’s
strategies and tactical performancestrategies and tactical performance..
Exhibit 2.2
Political/LegalPolitical/Legal factors include government regulations and legal
issues and define both formal and informal rules under which the firm
must operate. Some examples include_ Industry DevelopmentIndustry Development
PPolicy(IDP) in Cambodia 2015 to 2025(olicy(IDP) in Cambodia 2015 to 2025( see into footnoted):):
• Tax policyTax policy is improving procedure taxes obligation_ slide#39is improving procedure taxes obligation_ slide#39
• Employment laws(National employment policy2015-2025)Employment laws(National employment policy2015-2025) areare
very importance and necessary for implementation whenvery importance and necessary for implementation when
Cambodia step up to AEC: to promote & attract Inves-t_slide#40Cambodia step up to AEC: to promote & attract Inves-t_slide#40
• Environmental regulationsEnvironmental regulations are improving competitivenessare improving competitiveness
through comforting investment climate & transnational trade,through comforting investment climate & transnational trade,
providing market information and cutting down business'sproviding market information and cutting down business's
operating cost_operating cost_ slide#41slide#41
• Trade restrictionsTrade restrictions and tariffsand tariffs ((e.g.,e.g.,CLV restriction of trade in AEC ,CLV restriction of trade in AEC ,2015-20182015-2018))
• Political stability ( e.g., China policy )_Political stability ( e.g., China policy )_ slide#43-46slide#43-46
TRANSPARENCY-138
Chapter 2.Dr. Phea Vanna 2015
26. Employment Laws are very importance and
necessary for implementation when Cambodia step up
to AEC:
Promote investment through effectiveness labor
flow management and guarantee national
competitive advantages of labor market (mechanism
regulation for implementation _llabor straighteningabor straightening
requirement before jobs, employee & employer rightrequirement before jobs, employee & employer right
&duties and strikebreaker..&duties and strikebreaker..),
Investment attraction basics are considering on
the work place condition, high labor efficiency andwork place condition, high labor efficiency and
labor force weighlabor force weigh (depend on regulation issue to supportdepend on regulation issue to support
to Social investment for decreasing pressure labor weigh andto Social investment for decreasing pressure labor weigh and
keep a basic of competitiveness economykeep a basic of competitiveness economy). 40
27. Environmental regulationsEnvironmental regulations ObjectiveObjective isis improving competitivenessimproving competitiveness
through comforting investment climate & transnational trade,through comforting investment climate & transnational trade,
providing market information and cutting down business'sproviding market information and cutting down business's
operating costoperating cost::
Commercial comforting measure & export promotionCommercial comforting measure & export promotion(e.g.,(e.g.,
custom clearance_ slide#42): Min Fin& CDCcustom clearance_ slide#42): Min Fin& CDC
Improving industry standard and industry propertyImproving industry standard and industry property((e.g., qualitye.g., quality
management of scale &standard)management of scale &standard)
Improving procedure taxes obligation(Improving procedure taxes obligation(slide#42)slide#42)
Preparing labor market and Industry connections(Preparing labor market and Industry connections(e.g.,e.g., improvingimproving
triangle mechanism interrelationships includetriangle mechanism interrelationships include Government,Government,
employee and employeremployee and employer through labor adviser committee forthrough labor adviser committee for
regulatingregulating minimum weighminimum weigh that consistently tothat consistently to workerworker
efficiency and socio-economic condition and guarantee theefficiency and socio-economic condition and guarantee the
entire industry developmententire industry development.))
41
28. Business Environment Indicators, 2014
Country Cost to
Export
Ease of Doing
Legal Rights
Index
Labor Tax Total Tax RateBusiness Rank (0 = weak to
($ per container) (1 = business-friendly) 11 = strong) (% of comm. profits) (% of comm. profits)
Brunei
Darussalam 705 101 4 7.9 15.8
Cambodia 795 135 11 0.5 21
Indonesia 572 114 4 11.3 31.4
Lao PDR 1,950 148 4 5.6 25.8
Malaysia 525 18 7 16.4 39.2
Myanmar 620 177 2 0 47.7
Philippines 755 95 3 8 42.5
Singapore 460 1 8 15.1 18.4
Thailand 595 26 3 4.3 26.9
Viet Nam 610 78 7 23.7 40.8
Sources: World Bank. 2014. Cambodia: Doing Business 2015. Washington, DC.; and World Bank, World Development Indicators, accessed September 2015.
29. GE continueGE continueExhibit 2.2
• Economic factorsEconomic factors affect the purchasing power of potential customers andffect the purchasing power of potential customers and
the firm's cost of capital.the firm's cost of capital. The following are examples of factors in the macro-
economy: economic growth, interest rates ,exchange rates, and inflation
rate.
CPI (Cam-Inflation: 3.5 in 2014-2015) see into next slide 48-49
Interest rates (Cambodia:loan_12%& deposit_9.75%)
Exchange rates (NBC policy _3800 to 4200. Dollarization remained high, with
foreign currency deposits accounting for 82% of total liquidity.).slide#48
Unemployment{(Cam-labour flow into Cam-market 300000
person /year: only 50000 had Job vacancies(JV) and 250000 person
have no JV=83%)}:Cam-immigrant to Thai =81%(95% illegal immigrant _
UNFPA (2013). see into next slide 48 &50-53
Trends in CamGDP,2013_7.2%: 24% Industry sector contributed to
GDP,( during 1998 to 2013 increased at an average 12.4%, compared to
agriculture sector4.7% and services sector8.5%) and GDP_2014&2015: 7%
&7.3% [ind_11.7%,Agr_1.6% & Serv_7.1%]}.See : Slides54 to 58 for detail.
Changes in stock market valuations(stock market is the best choice for
long term gather financial investment).
TRANSPARENCY-147
30. ASEAN Macroeconomic Indicators
Country
GDP GDP per Capita GDP Growth Unemployment Inflation
$ million $ $ PPP (%) (%) (%)
2014 (%) 2014 2014 2013 2014
Brunei
Darussalam
17,257 0.7 40,776 75,700 5.3 3.8 –0.2
Cambodia 16,709 0.7 1,084 3,242 7 0.3 3.9
Indonesia 888,538 35.9 3,515 10,585 5 6.3 6.4
Lao PDR 11,772 0.5 1,708 5,162 7.5 1.4 4.1
Malaysia 326,933 13.2 10,830 24,715 6 3.2 3.1
Myanmar 64,330 2.6 1,198 .… 8.5 3.4 5.5
Philippines 284,582 11.5 2,843 6,916 6.1 7.1 4.1
Singapore 307,872 12.4 56,287 82,763 2.9 2.8 1
Thailand 373,804 15.1 5,561 14,661 0.7 0.7 1.9
Viet Nam 186,205 7.5 2,052 5,629 6 2 4.1
Dr. Phea Vanna 2016
Source: World Bank, World Development Indicators, accessed September 2015.
Cam-GDP(7.3%), 2015: Industry_ 11.7%(Export_14,1%{8.5b} & Textile_10.2% ), Agriculture_1.6% and
Service_7.6%(Bank, trade & transport, telecommunications =8% , and Tourist _6.1%)
31. Employment & Unemployment :
– Increase in temporary workers [[Cam labor force from 2011-15( 7.9m to
9.6m ] : agriculture_55.8%, industry_16.9%,services_27.3%.
• Labor force participation rate (aged 15-64yrs: 64%) :ØN=82%, U=73% &
R=85%
Industry sectorIndustry sector is the main fundamental of creating jobs: 1993, 72% agriculture sector and only 5%
industry sector. 2008 census founded rose to 8.6%(600000 workers) of totally workers and 2012 in this sector
increase to18.6%(1.4 million workers), but in hot season rose to 25.2%(1.8 million workers): Industries
labor force participation rate( Garment _50%, 25% construction, 10% food
processing industries & beverage, and 13% some other manufactories, socio-
economic2007-2012 )
Scale of manufactory:( location:PP:68%, Candal :13% & other provinces :12%)
Micro- factory (1to 10 workers): 97% (69,851 factories), labor force: 29.3%(162,335 workers) and capital
investment:12%(396mln).(99% local investment)
Small factory (11to 50 workers): 1.9% (5,861 factories), labor force: 5.2%(28,706 workers) and capital
investment: 9.1%(300mln). (94% local investment)
Medium factory (51to 100 workers): 0.2% (530 factories), labor force: 2.2%(11,949 workers) and capital
investment:2.9%(94.4mln). (37.14% foreign investment)
Large factory (100+ workers): 0.6% (609 factories), labor force: 63.3%(350,260 workers) and capital
investment:76%(2,500mln).(63% foreign investment)
Conclusion: Industry structure depend on entire big factories, if uncertainty envi-t easily impact to labor
market ,economic growth and down competitive power(IDP support SME).
• Unemployment rate (aged 15-64yrs) : ØN =2.3%,U=4.4% & R=1.8%
Dr. Phea Vanna 2015
32. 51
1993-
2012
1993-
1999
1999-
2008
2008-
2009
2009-
2012
2012-
2015
1.7 3.9 0.1 8.1 0.4 8.2
10.7 10.2 12.8 3.8 7.8 16.1
5 -0.4 8.6 -3.3 8.8 14.3
3.5 3.3 3.3 4.2 3.9 11.5
(%), -
Hyeok-Jeong (2013), Skills Need Assessment of Cambodia Labor Market in Policy Agenda for Cambodia in
Developing Industrial Skills, Industrial Complex, and Agro-processing Industry, Korean Development Institute,
2013
34. Employment by sectorEmployment by sector as a share of total
employment under the baseline and AEC scenarios
(percent)
Cambodia
2010 Baseline 2025 Baseline 2025 AEC II-I
scenario scenario (I) scenario (II) (percentage points)
Agriculture 55 50 48.3 -1.7
Industry 14.914.9 18.118.1 19.419.4 1.31.3
Mining 0.2 0.3 0.3 0
Food processing 1.5 1.3 0.7 -0.6
Textiles 1.4 1.4 1.7 0.3
Apparel 5.1 4.8 4.7 -0.1
Wood products 0.3 0.3 0.4 0.1
Chemicals 0.5 0.8 1 0.2
Metals 0.4 0.5 0.5 0
Electrical equipment 0.1 0.2 0.2 0
Vehicles 0.2 0.3 0.5 0.2
Machinery 0.1 0.1 0.2 0
Other manufacturing 0.2 0.3 0.4 0.1
Utilities 0.2 0.2 0.3 0
Construction 4.7 7.6 8.5 0.9
Services 30.1 31.9 32.3 0.4
Trade and transportation 15.9 17.5 19.1 1.5
Private services 5.2 5.3 5 -0.3
Government services 9 9.1 8.2 -0.8
Total 100 100 100 0
Source : ASEAN Community 2015: Managing integration for better jobs and shared prosperity
35. GDP contribution Growth rate 2001-2025
57
Sectors(%) 2008 2013 2015 2020 2025
Agriculture 32.8 31.6 29.0 25 23
Industry 22.4 24.1 26.2 28 30
- Factory 15.3 15.5 16 18 20
Service 38.8 38.5 39.4 40 40
Subsidiary& Taxation 6 5.8 5.4 7 7
Conclusion: 24% Industry sector contributed to GDP,2013(during 1998 to 2013 increased at an average
12.4%(11.7%,2015),compared to 4.7%(1.6%,2015)agriculture sector and 8.5% (7.1% ,2015 )
services sector )
36. 58
As a whole, ASEAN’s recent economic
performance has been remarkable. In 2013,
ASEAN’s gross domestic product (GDP)
stood at $2.4 trillion, accounting for 3.3
percent of the world’s economy.
Country
GDP
$ million
2014 (%)
Brunei
Darussalam
17,257 0.7
Cambodia 16,709 0.7
Indonesia 888,538 35.9
Lao PDR 11,772 0.5
Malaysia 326,933 13.2
Myanmar 64,330 2.6
Philippines 284,582 11.5
Singapore 307,872 12.4
Thailand 373,804 15.1
Viet Nam 186,205 7.5
37. GE continueGE continue Technological factorsTechnological factors can lower barriers to entry, reduce minimum
efficient production levels(ESc), and influence outsourcing
decisions. Some technological factors includeSome technological factors include:(R&D activity , automation,R&D activity , automation,
technology incentive and rate of technological changetechnology incentive and rate of technological change) :
– Price comparison sites : “Automated price comparison services will be developed,
allowing people to see prices across multiple websites, making it effortless to find the
cheapest product for all industries. E,g., Sites like NexTag and PriceGrabber are built
specifically for price comparisons.
– Mobile devices: “People will carry around small devices that allow them to constantly stay in
touch and do electronic business from wherever they are.
– Instant payments and financing online, better healthcare through the web
– Online home-monitoring: E.g., Dropcam sells home surveillance cameras that
make home-monitoring easy. Google bought the company for $555 million in 2014.
– Automated promotional offers.eg., Google and Facebook ads can offer
promotional ads based on the user’s location and interests.(It suggests activities,
discounts, offers, and cheaper prices for all the things that you want to take part in.”). Global (Global ( Standardization leads to higher economies of scale, which lowers
costs , but limited ability to adapt to local markets):
– Increasing Global trade(Strong integration across various bus-es);
– Currency Exchange Rates(Trade off :Cambodia & Thai )
– Emergence of the Indian ,Chinese &Russian Economies
– Trade Agreements among regional blocs (e.g. WTO, EU &
ASIAN _ leading to decreasing tariffs)
38. Access to World Market
Access to The U.S. Market in 1996
Access to The E.U. Market in 1996
Member of Association of South-East Asian Nations
(ASEAN) in 1999
Cambodia stands to gain plenty(abundant benefits) if ASEAN economic integration continues
on course. The country already receives tax favors from the EU for using fabric from
ASEAN members for its clothing, and elimination of most tariffs between ASEAN
countries in 2010 should reduce the cost of fabric imports.
Member of the World Trade Organization (WTO) in
2004( Min of Comercial,2011_65% contributed GDP :
agriculture(33.4%),Industry(30%) & ….)
Member of Various Regional Trade Agreements
(MFN/GSP Market Access).see into slide#47
39. MFN/GSP Market Access
Australia
Austria
Belarus
Belgium
Bulgaria
Canada
China
Czech
Republic
Denmark
Finland
Poland
Portugal
ROK
Russian
Federation
Slovakia
Spain
Sweden
Switzerland
UK
USA
France
Germany
Hungary
Ireland
Italy
Korea
Luxemburg
Japan
Netherlands
New Zealand
Norway
….and the ASEAN Integration System
of Preferences (AISP) from the ASEAN 6
MFN: Most Favored Nation
GSP: Generalized System
of Preferences
40. 76
.
Phnom Penh
The Philippines
Singapore
Indonesia
Myanmar
Southern China
Manila
Bangkok
Kunming
Yangon
Brunei
Jakarta
Begawan
Hanoi
Laos
o Vientiane
CAMBODIA
Malaysia
Kuala Lumpur
Thailand
Vietnam
1h:30 on average
Invest in Cambodia and you have 15 million
customers and you have 622 million customers at
your doorstep
76
41. Michael E. Porter, PhD in Business Economics
from Harvard University in 1973
The Complete Porter Strategic Models
1. Porter’s Five Forces Analysis
2. Value Chain, See into Ch.3
3. Generic Strategies, See into
Ch.5
42. The Objectives of Competitive
Analysis
The Objectives of Competitive
Analysis
To understand how industry structure drives competition, which
determines the level of industry profitability:
To assess industry attractiveness of market (Maximize overall industry profitability)
To formulate strategies to change industry structure and improving industry
profitability
To use evidence on changes in industry structure to forecast future
profitability (To assess how a firm can improve its competitive position
& the average expected profitability levels)
To identify Key Success Factors(OT)_Exhibit 2.2
43. Porter’s five forces model of industry competition
Dr. Phea Vanna 2010
Exhibit 2.2
Barriers to Entry
Proprietary learning curve
Absolute cost advantages
Access to inputs
Access to distribution
Economies of scale_ i.e., the most cost
efficient level of production are at minimum
Government policy
Capital requirements
Brand identity
Switching costs
Expected retaliation(repayment)
Proprietary(owner) products
Switching costs
Buyer inclination(наклонение) to
substitute(e.g., shifts in consumer tastes away from the
firm's products or more alternatives)
Price-performance trade-off of substitutes
Changing prices - raising or lowering prices to gain a
temporary advantage
Supplier concentration*(percentage of market share
owned by the firms. e.g.,)
Importance of volume to supplier(e.g.,Rus gas sold to
China)
Differentiation of inputs(e.g.,Q or P for identification)
Impact of inputs on cost or differentiation
Switching costs of firms in the industry
Presence of substitute inputs
Threat of forward integration
Cost relative to total purchases in industry
Bargaining leverage
Buyer volume
Buyer information
Brand identity
Price sensitivity
Threat of backward integration
Product differentiation
Buyer concentration vs. industry
Substitutes available
Buyers' incentives
45. Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
• Barriers to Entry
Government regulations_ The lack of government
standards (basic quality standards) that are being
imposed by government agencies to water bottlers to
ensure health and safety for consumers(Ministry of
Industry , MRD ,MWRM and PPWSA) and presents a
low barrier of entry for a potential new entrant.
There is no need for new entrant to secure license and / or to
have their products analyze by independent body.
Dr. Phea Vanna 2016
46. Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
• Barriers to Entry
Unsophisticated market_ the Cambodian bottled
water industry is still at its infancy stage, and it is
composed of relatively unsophisticated consumers
[Source: World Bank, September 2015. Poverty $3(70%)] and
small locational manufacturers.
Our research indicates that they are more than 35 brands of
bottled water available in Cambodian market: Local &
Imported brands
Dr. Phea Vanna 2016
47. Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
1) Local bottled water manufactures have 25 companies
and only the producer of brands Eau de Vie, New Day,Uy
Mey ,Sin Fu Food product Co.Ltd(OR), and Cambodia New
Era(ALO)….can be considered as large scale operation
(60workers) and are owned by Chinese investors.
In term of geographic locations, only a few companies[(Clare
Fontaine( spring water) and Alpine Sprint(distilled) come from
Sihanouk Ville] and the other 23 small family business companies
(10 workers) are from Phnom Penh): They can easily become a
manufacturer even if they only invest in unsophisticated
machineries. The lack of standard and regulatory body allows these
operators to continue producing bottled water even if their products
are substandard.
Dr. Phea Vanna 2016
48. Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
2) Bottled water importers_ They are numerous importers of
bottled water brands in Cambodia Markets _ namely:
Evian(France/Thai) is one of the widely available and most
expensive brands in Cambodia.it is imported an authorized
distributor by ANCO brothers Co.Ltd),Volvic (France/Thai)
,Aquafina(Pepsi-VN), Spritzer(Malaysia) and Fuji…. are present
in almost all stores and directly supplies supermarkets,
restaurant and five-star hotels.
The others, Mont Fleur, Minere (NesleThai), Aix Les Bains
(France/Thai), Luchon (France/Thai), Ondine and Eau de
Source (France/Thai),… can't be found in all stores (availability
is sporadic).
Dr. Phea Vanna 2016
49. Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
Distribution networks are the points of sales either intermediate or
direct to the consumers.
local companies with small scale bottled water distribute
the products themselves to local shops, super markets,
factories, hotels, and restaurants.
Imported bottled water such as Evian, sprizer, Volvic…are
distributed through the distribution operations of their
respective importers, which directly supply the super
markets, luxury hotels, and restaurants.
Street vendors are an alternative distribution means. They
buy bottled water and resell them to tourist. They are highly
visible in tourist spots in the country. They are no brand
loyalty for vendor since they buy the brands that is available
and that would offer them better margins.
Dr. Phea Vanna 2016
50. Bargaining Power of Supplier
Supplier to local bottled water producers in Cambodia
provide the following inputs:
Water is estimated that 80% of local companies use water
sourced from the PPWSA. Water can be bought at $0.30 per
cubic meter. Other producers use water sourced from rivers,
lakes and deep well(see into slide#89). So, the bargaining power
of water supplier is high if the water bottler sources its water
from the PPWSA. if water comes from a natural source, the
bargaining power is practically non-existent.
Dr. Phea Vanna 2016
Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
51. Country Overview
Main sources of drinking water in Cambodia (wet and dry
season)
Source: NIS and www.rdic.org
In 2014, about 51 percent of the households in Cambodia had a “safe/improved water
source” in the wet season and about 58 percent in dry season. One of the differences
between wet (49% ) and dry season (42% )is that a higher share of the households have
access to unimproved rainwater in wet season.
52. Bargaining Power of Supplier
Bottles and Labels_ they are more than 35 brands
identified in Cambodian market use blow molded plastic
(Suppliers: Sumatra plastic & packaging is owned by
Malaysia, Asia plastic manufacturing is owned by Cambodian ,
and Sandy Co.Ltd is owned by Cambodian ). All expect 4
brands come in bottle size of 0.5L, 18 out of the 35brands
have bottle size of 1.5L and odds size of 250,330 &350ml.
In terms of packaging, the bargaining power of the PET and
resin suppliers is high because there are only few of them in
Cambodia. All brands are packaged in blow molded
bottles(no price difference between water in plastic and
blow molded bottles _ Average cost of Bottles, slide#10 ).
The bottles can be ordered from manufacturers in Malaysia ,
Thailand and VN. Dr. Phea Vanna 2016
Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
53. Bargaining Power of Supplier
Average cost of Bottles
Dr. Phea Vanna 2016
Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
Bottle
size
Type of Bottle
Wholesale
price
(package only)
Wholesale price
(bottle water) %
Per 200
bottles
Per
bottle
Per bottle
350ml Blow molded $6 $0.03 $0.15 20
500ml Blow molded $8.5 $0.04 $0.12 34
1 L Plastic $10 $0.05 $0.10 50
1.5L Blow molded $0.10 $0.33 30
54. Bargaining Power of Supplier
Technology and Equipment .For technology, the
bargaining power for top of the line technology is high
since training and support is needed from the supplier in
order to ensure the correct operation and maintenance of
the water treatment and bottling system. as for lower
technology system , bargaining power is low since the
system is fairly simple and consumables such as filters and
parts can be easily sourced. So, this kind of production
system have limited market due to quality concerns.
E.g., Some local brands such as Eurotech boast of
technology sourced from Enviro Ltd from UK.
Dr. Phea Vanna 2016
Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
55. Bargaining Power of Buyers
• They are basically 2-groups of consumers of bottle water_ local
(the price sensitive Cambodian consumers)and non-local(the quality
(Brand), which consist of foreigners visiting for tourism or business.
Market Situation
Brands_ there are more than 30 local brands(only a few brand
of spring water, two mineral water, and two deionized water) and 9 imported
brands from Malaysia, VN and Thailand(a few of which are
mineral water and the most popular in the market is Evian).
Origin(whether local or imported)
Type of water
the bottle size_ All expect 4 brands come in bottle size of 0.5L, 18 out of
the 35brands have bottle size of 1.5L and odds size of 250,330 &350ml.
the type of packaging _ blow molded bottle Dr. Phea Vanna 2016
Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
56. Bargaining Power of Buyers
Prices _ the bottle water can be grouped into Premium
and non-premium segment:
1.The premium segment includes the brands import
from France such as EVian, Volvic, AIX, and Luchon.
The bottled sizes of 0.5Liters averages between $0.75-
0.9 in supermarket(Evian is the market leader in all
supermarkets, restaurants and hotels)
2.The non-premium brands range from $ 0.11-0.35 for a
0.5Liters( local brand for $0.125 and Evian for $0.7
in supermarket, but in five star hotels and restaurants
is sold for $3-3.5 )
Dr. Phea Vanna 2010
Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
57. Bargaining Power of Buyers
Local consumes inferior local and Asian brands and their main decision making factors
are availability and price. Only the upper segment of local population (Urban_ 20%, Rural
_80%) can afford higher quality bottled water and may thus be not too price sensitive(GDP
per Capita in 2015,Tab…). The key to sustainable patronage would be price
competitiveness at higher quality and constant availability market.
Dr. Phea Vanna 2010
Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
Country
GDP per Capita GDP Growth
$ $ PPP (%)
2014 2014
Brunei Darussalam 40,776 75,700 5.3
Cambodia 1,084 3,242 7
Indonesia 3,515 10,585 5
Lao PDR 1,708 5,162 7.5
Malaysia 10,830 24,715 6
Myanmar 1,198 .… 8.5
Philippines 2,843 6,916 6.1
Singapore 56,287 82,763 2.9
Thailand 5,561 14,661 0.7
Viet Nam 2,052 5,629 6
59. Urban-rural areas- key demographic data
Description National
average
Urban areas Rural areas
Household size 4.6 4.8 4.6
% of HH using electricity as main source of light 48 94 36
% of HH accessible to improved sources of% of HH accessible to improved sources of
water (water (see into next slides _30-31see into next slides _30-31))
5757 81.881.8 5050
% of HH having toilet facility with premises 48.7 87.5 38.5
Adult literacy rate (aged 15+) 79.7 90.3 76.5
Labor force participation rate (aged 15-64yrs) 82.2 73.2 84.8
Unemployment rate (aged 15-64yrs) 2.3 4.4 1.8
% of migrant by place of last residence 28.9 49.4 23.3
Total fertility rate per 1,000 live births 2.8 2.1 3.1
Infant mortality rate per 1,000 live births 33 9 38
Under-5 mortality rate per 1,000 live births 53 15 60
Life expectancy at birth 68.9 76.8 67.6
Dr. Phea Vanna 2015
60. Urban-rural areas- key demographic data
Description National
average
PP Urban
areas
Rural areas
Number of households 3,261,000 369,000 366,000 2,526,000
HH accessible to improved sources of
water (%)
57 93.3 81.8 50
Treatment of drinking water(%) 70.8 90 75.8 67.2
Source: Cambodia Socio-economic Survey, NIS, 2014
The HH accessible to improved sources shows that improved drinking water source for the
urban areas had increased from 78 percent of households in 2009 to 81 percent in 2014. For
rural areas, improved drinking water source had increased from 42 percent of households in
2009 to 47 percent in 2014.
Treatment of drinking water shows that 71 percent of the Cambodian households said that
they always treat water for drinking, 10 percent of households said that they sometimes treated
water for drinking and 19 percent of households never treated their drinking water. However, the
households that had always treated drinking water over two five-year periods in Cambodia.
As observed, the tendency was towards increased treatment of drinking water was, from 53
percent of households in 2004 to 60 percent in 2009 and 71 percent in 2014.
61. Bargaining Power of Buyers
Hotels and restaurants grew at an average annual rate of 25
to 30% over 1995-2010: Hotel_292, guesthouse_551and
restaurant_...
PP: Hotel_126 , guesthouse_123 and restaurant_.....
Siem Reap: Hotel_100 , guesthouse_200 and restaurant_.....
Market and supermarkets .They are market in each town
and district. Bottled water is either delivered by
manufacturer's own transports or bought by distributors
and sent to the markets to individual stalls.
Supermarkets(10 mayor supermarkets in PP and largest is
the Lucky group with 4 branches and other provinces) buy
from the manufacturers and stock up on bottled water,
which is consumed by both locals and tourists. Dr. Phea Vanna 2016
Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
62. Bargaining Power of Buyers
Foreign visitors are normally health conscious, having
been aware of the potential health hazards of the
unpredictability of quality water in places they visit. given
the level of development of Cambodia , it is surely
perceived as risky place for water consumption. As tourists
are consumers who mainly comprise the upscale market for
bottled water, their the main decision making factor is
water quality established through brand recognition and
manufacturer's guarantees . There are many brands
available in the market competing for the increasing
demand of this consumer group. So, the key to sustainable
patronage would be product credibility and constant
availability. Dr. Phea Vanna 2016
Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
63. Substitutes Substitutes for bottled water include tap water(is general
consumable without having been boiled for considerable
amount of time), water run through water filters or
purifiers, any available beverage. Home water purifying
systems cost around $600 [VN,$25 with 3 months of water
filter($4/per unit)] but their effectiveness remains doubtful
as contamination can occur even after filtration have been
performed.
In contrast, bottled water assures consumers of clean water
from filtration to packaging.
Other substitutes such as other non-alcoholic beverages like
soft drinks and juice drinks are more expensive(therefor
not for price sensitive local consumers) or viewed
unhealthy, if there are artificial additives, or fattening, if not
Dr. Phea Vanna 2016
Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
64. Inter-firm Rivalry
Competition is intense in the bottled water business. Actual
fact that there are 35 brands in the market attests the
profitability and potential of the industry.
Demand still far exceeds supply and id growing "pic _ only
8% of bottled water of Cam-market".e.g., Ozone, Hi-Tech,
Vital& Oral are mayor plyer in the market, supply of good
quality bottled water decreased..
With the industry as its infancy stage and dominated by low
volume producers.
So, the key to dealing with intense competition is the
knowledge of the existing and potential markets and the
establishment of brand presence through constant
availability "Socio -economic segment" Dr. Phea Vanna 2016
Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
65. Key Success Factors
the following cites the strategies on how to become a
significant player in Cambodia's bottled water industry:
A reputation of producing quality products/ beverages.
Since water is delicate product, the credibility and reputation of
the manufacturer and brand is important.
The reliable water purification, technology and water sources, as
well as hygienic manufacturing processes are critical in building
a credible image for the brand and the company.
Advertising and trade marketing is essential in building image
especially for a new entrant and new brand
Dr. Phea Vanna 2016
Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
66. Key Success Factors
the following cites the strategies on how to become a
significant player in Cambodia's bottled water industry:
Source of water and ownership of source
The water source is an important aspect of the business.
1. it defines the type(which is a source of differentiation) of water
will be sold , and
2. it dictates the type of technology to be used for water processing
e.g., The sources that have less exposure to pollution and other
contaminants may require less sophisticate purification
technology.
Dr. Phea Vanna 2016
Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
67. Key Success Factors
the following cites the strategies on how to become a
significant player in Cambodia's bottled water industry:
Source of water and ownership of source
In the same note, Ownership of water source(e.g., the spring or
the distilling equipment) is equally important. if facilitates factual
claims about quality, reduce costs and increases margins.
Evaluation of prospective factors:
Proximity to mayor markets
Quality of water
Flow rate and reserves
Security from contamination
Cost of the property and its development
Dr. Phea Vanna 2016
Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
68. Key Success Factors
the following cites the strategies on how to become a
significant player in Cambodia's bottled water industry:
Transport costs_ Given the lack of transportation
infrastructure in Cambodia, transportation cost
consideration is a mayor determinant in the success of
the venture. So, if the water source and the production
plant are closer to the market and mayor transport
connected points, transportation costs can be minimized
or at least scaled down.
Dr. Phea Vanna 2016
Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
69. Distribution Channels
There are 3 manners of distributing bottled water:
1.Off trade segment_ consist of supermarkets and retailer outlets
where consumption does not take place at the point of purchase.
2. on trade seg-t_ represented by all those retailer outlets where
consumtion is at the point of purchase" hotels,guesthouses,
restaurants bars, street vendors…"
3. Direct delivery and Institutional seg-t"homes and offices of the 20
liter bottles".
1&2 are sold by Both local& foreign brands. The Key to effective
distribution is high visible and placement in all types of retail outlets .To
aid in distribution effectiveness , some companies have their own
vehicles(from Korea, cost $3000 to 6000 depend on the model year)
and panel van (cost between $300 to 400)for delivery to retail outlets .
Promotion and advertising are combination of TV ads, Social
networks" Facebook or…" Newspaper magazines, billboarda and travel
maps.
Key Success Factors
70. Key Success Factors
Extensive distribution network
Two essential contributors to market penetration and market
share retention are distribution(which translates to the market
reach ) and availability(which translates to market share since
brand differentiation is weak and many consumers purchase
the bottled water that is available in the outlet accessible to
them)
Building a strong and extensive network requires a lot of
time and investment( Study areas: geographic locations or
points of sales). Thus, it is best way that can be prioritized in
the immediate, short and medium terms in order to accelerate
market penetration and establish brand recognition the
fastest(for new entrant to make itself a significant player in
shortest possible time).
Dr. Phea Vanna 2016
Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
71. Key Success Factors
Economies of scale(ESc)
To the extent(improve the industry's competitive position) that
there are economies of scale, it will be difficult for a new firm to
come in and compete with existing plyers.
ESc is the most cost efficient level of production are at minimum
cost efficient scale(MES) and can derive cost advantage through
high volumes of production: So industries players with high MES
deter entry of small for start-up businesses. The contrast, at less
than MES there must be a consideration that permits the firm to
sell at a premium price(Diff-tion strategy reflects Value actually
delivered to the buyer).
The lower cost provide leeway the company has to price its
products competitively in order to gain market share from existing
plyers.
The potential market for bottled water is scope thus providing
advantages of ESc in bottling, advertising and distribution.
Dr. Phea Vanna 2016
Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
72. Key Success Factors
Advertising and promotion
Effective advertising is required to differentiate a new
product.
in addition, trade and consumer promos will be needed
to win strategic store location, shelf space and shopping
carts.
Providing the retail outlets with chillers(with their logo)
would ensure shelf space and increase the visibility of
one's products. For a new entrant, visibility through
mass advertising is essential to introduce and trade
promos are convinced the retailers to carry its
products(providing some benefit to distributor).
Dr. Phea Vanna 2016
Porter's Five Forces Analysis
(e.g., Voda international Co.Ltd)
73. Implication to New Entrant
• Based on the structure analysis of bottled water industry in
Cambodia, there is huge opportunity for a new entrant in the
market. The analysis players shows that there are numerous
competing firms, a great majority(with exception of the Eau de Vie,
New day, and Uy Mey group) are small companies with backyard
operations that have neither the resources nor technology to be
significant players. The closure of Voda Co. (Jasmin and Malisa
brands) has created opportunities for a competent producer to
be a major market shareholder.
• While the lack of industry regulation and quality standard don't
deter firms with substandard production processes to enter into the
industry, such as situation could also present an opportunity for a
competent new entrant.
Dr. Phea Vanna 2010
74. Implication to New Entrant
• In term of success factors in the industry, a new entrant can't do
without investing in building a distribution network and
capturing space(this means a new entrant don't only need to work
internally on its organization but also externally to win the favour
of different types of bottle water retailers).
Dr. Phea Vanna 2010
75. Threat of new entrants(objectives)
• Expands industry capacity(improve firm's
competitive position) and increases competition
for market share( attractive market)
Renault-Nissan alliance _ collective market
capitalization from 20.4B to 84.9B in 2006.
• May include start up as well as existing firms
expanding into new business(Capital requirements )
Phillip Morris’ purchase of Miller Brewing
Dr. Phea Vanna 2016
76. New Entrants: Barriers to Entry
From a strategic perspective, barriers can be created or exploited to enhance a
firm's competitive advantage from several sources:
•Economies of Scale
– To the extent(improve the industry's competitive position) that there are
economies of scale, it will be difficult for a new firm to come in and
compete with established firms.
the most cost efficient level of production are at minimum cost efficient
scale(MES) for business: So industries with high MES deter entry of
small for start-up businesses. To operate at less than MES there must be a
consideration that permits the firm to sell at a premium price ( Differe-tion
strategy reflects Value actually delivered to the buyer). See into footnote.
•Product Differentiation(core competencies )
– To the extent that the firm’s products are distinctive competency and non-
copies, new firms won’t be able to come in and take away customers.
•Brand Identification(customer loyalty through advertising, customer service..)
– To the extent that there is brand identification, customers will remember
the firm’s product and will resist switching.
•Switching Cost: it is costly for customer to switch, new entrants won’t be
able to convince them to do so.(Low switching costs(MES) increases
rivalry).see into Next slide#76
77. New Entrants: Barriers to Entry
• Access to Distribution Channels
– If the firm has preferential or monopolistic access to distribution
channels, it is more resistant to competition.(e.g., Cam-petroleum….)
• Capital Requirements
– If capital requirements are high, new under-capitalized firms won’t be
able to enter the industry.(e.g., advertising of International Co.)
• Access to Latest Technology
– If technology is important in the industry, new firms are less likely to
have access to them, which is good for established firms.
• Experience and Learning Effects(or Proprietary learning curve)
– If experience is necessary for a firm to figure out how to operate
efficiently, established firms have a distinct advantages(cost & D).
e.g., firms acquire cost advantages are improving process
efficiencies( through skill in designing products & high level of expertise
in manufacturing process engineering…), gaining unique access to a
large source of lower cost materials, making optimal outsourcing and
vertical integration decisions .
78. Easy to Enter if there are:
Common technology
Little brand franchise
Access to distribution channels
( loosening of regulations)
High MESHigh MES scale threshold(нижняя граница)
Difficult to Enter if there are:
Patented or proprietary knowhow
Difficulty in brand switching
Restricted distribution channels (e.g.,
firm has preferential or monopolistic access to
distribution channels)
Lower MESLower MES scale threshold(Esc)
Easy to Exit if there are:
Salable assets(популярность)
Low exit costs
Independent businesses
Difficult to Exit if there are:
Specialized assets
High exit costs( initial Capital investment
Interrelated businesses
Exit barriers limit the ability of a firm to leave the market and can exacerbate (difficult) rivalry - or
unable to leave the industry, So, firm must compete: e.g., Regulatory restrictions; brand names ;
patents and unique know-how(technologies)
79. Supplier power – high when buyers have few choices and low when
choices are many
The opposite of buyer power
122
Bargaining power of suppliers : factors
Supplier power involved some criteria are Powerful/Weak :
Determine pricing and qualitypricing and quality
Differentiation or Switching costsDifferentiation or Switching costs(e.g., Time & system testing, employee retraining..
Number of available suppliers
ForwardForward integration(Control aspect considering on the access to distribution channels: can
impact barriers to entry and which can assure cooperation of key value adding
players)
80. • Number of Important Suppliers
– The fewer number of important suppliers,
the more power they have over the firm.
• Availability of Substitutes for the Suppliers’
Products(weak Supplier)
– This would reduce supplier power(choices are many)
• Differentiation or Switching Costs of Suppliers’
Products& services(Q&P?):
– Improving product differentiation - improving features, implementing
innovations in the manufacturing process and in the product itself.
– If it’s difficult for the firm to switch to other suppliers, the
current suppliers can charge more on products& services.
81. • Suppliers’ Threat of Forward Integration
– To the extent that suppliers might potentially
themselves become competitors, they are less
reliable and need to be looked at strategically(his
output goods, himself. Control aspect considering!)
• Suppliers’ Contribution to Quality or Service
of the Industry Products
– Product quality is maintained quality and additional features
and support services may be added. this will increase
supplier power.
• Importance of Industry to Suppliers’ Profits
82. Bargaining power of suppliers
Dr. Phea Vanna 2013
Suppliers are PowerfulPowerful if: Example
Credible forward integration threat by
suppliers
manufacturer of hospital supplies ,
acquired American Hospital Supply, a
distributor
Suppliers concentrated Drug industry's relationship to hospitals
Significant cost to switch suppliers Microsoft's relationship with PC
manufacturers
Customers Powerful Boycott of grocery stores selling non-
union picked grapes
83. Bargaining power of suppliers
Dr. Phea Vanna 2013
Suppliers are WeakWeak if: Example
Many competitive suppliers - product is
standardized
Tire industry relationship to automobile
manufacturers
Purchase commodity products Grocery store brand label products
Credible backward integration threat by
purchasers
Timber producers relationship to paper
companies
Concentrated purchasers Garment industry relationship to major
department stores
Customers Weak Travel agents' relationship to airlines
84. Bargaining power of buyers
Bargaining power of buyers of industry output ( final
consumers(Home buyer & Government buyers _ purchase products in
their final form ) & intermediate consumers (Business buyer _buy raw
materials or wholesale products before selling them to final consumers)
Motivated to negotiate for lower prices, quality,
more services, etc.
Bargaining power of buyer groups a function
of:
– Market situation
– Relative importance of purchases from the
industry compared to its overall business activity
(large volume, lower, medium and high levels).Next slide
Dr. Phea Vanna 2013
85. • Number of Important Buyers(Cam-Garment: EU& USA)
– The greater the number of important buyers, the less
power does the firm have to manipulate prices()
• Availability of Substitutes for the Industry
Products( base on core competency)
– The impact of this on price elasticity of demand for the
industry’s products is obvious(заметный). (e.g.,
Permanent or temporary price change policy)
• Buyer’s Switching Costs(firm has access to Cost advantage)
– This is relevant both in terms of switching to competitors’
products and switching to products manufactured by other
industries.
• Buyer’s Threat of Backward Integration
– The buyer might choose to integrate backward and
manufacture his input goods, himself. This means that
buyers have to be looked at strategically(Cost aspect
considering!). e.g., Large auto manufacturers' purchases of tires
86. Substitutes matter when customers
are attracted to the products of firms in
other industries
Smartphone(see into next slide)
Eyeglasses and contact lens v. laser surgery
Sugar v. artificial sweeteners
Newspapers v. TV v. Internet
Examples
88. TraditionalTraditional
MarketMarket
SubstitutesSubstitutes
New marketNew market
ServicesServices ProductsProducts
Topic: The five competitive force and corporate strategic analysis
•E.g., New product development
•Where is the substitute product located
on the Price/Value dimensions?(e.g.,
Mobile phone in manufacturing process:
IPhone vs Samsung) see into slide#102-
103
e.g., Service differentiation
New market involve Brand Identification_ Advertising, Customer service and Promoting a
product or service (firm's programs: discount, provide the reward to buyers & distributors
and other options.).
Traditional marketing refers to considering Product, Price, Promotion before
offering a products& service to buyers. e.g., Sales in locals and face to face
a threat of substitutes exists when a product's demand is affected by the price change of a substitute product. A
product's price elasticity is affected by substitute products - as more substitutes become available, the demand
becomes more elastic since customers have more alternatives. A close substitute product constrains the ability
of firms in an industry to raise prices.
89. Threat of substitutes depend on:
– Availability of Close Substitutes(e.g., Mobile phone:
when a product's price elasticity of demand is affected by substitute products - as more
substitutes become available, the demand becomes more elastic since customers have
more alternatives. A close substitute product constrains the ability of firms in an
industry to raise prices.)
– User’s Switching Costs(Low switching costs increases rivalry.
When a customer can freely switch from one product to another there is a
greater struggle to capture customers. So, this is relevant both in terms of
switching to competitors’ products and switching to products manufactured by
other industries.)
– Substitute Producer’s Profitability and
Aggressiveness
– Where is the substitute product located on the
Price/Value dimensions?(e.g., Mobile phone in
manufacturing process IPhone) see next slide #95-96
91. Value of production _ scope of manufacturing production and revenue.
iPhone sale
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
200000
iPhone in thousands Revenue in millions
In Q4 2014 Apple took 93% of smartphone industry profit
92. Industry Competition:
Rivalry Among Competitors
• Industry Growth(the firm seeks to build brand preference and
increase market share: Product quality, Pricing , Distribution
channel , and promotion)
– If the industry is growing, there’s more room for
everybody; less pressure on the firm
– In a growing market, firms are able to improve
revenues simply because of the expanding market share.
• Product Differentiation(e.g., innovation(provide access to a
wide variety of markets), efficiency(superior benefits to the buyers& firm),
quality, and customer responsiveness(difficulty to compete with
substitute of products).
– If products are differentiated, markets are in a sense, segmented. Brand
identification, on the other hand, tends to constrain rivalry.
93. In pursuing an advantage over its rivals, a firm can
choose from several competitive moves:
Changing prices - raising or lowering prices to gain
a temporary advantage.(e.g.,Industry life circle )
Improving product differentiation - improving
features, implementing innovations in the
manufacturing process and in the product itself.
Creatively using channels of distribution - using
vertical integrationvertical integration or using a distribution channel
that is novel to the industry.
Exploiting relationships with suppliers - for example,
Microsoft's relationship with PC manufacturers. So, Microsoft
set high quality standards and required suppliers to meet its
demands for product specifications and price.
Dr. Phea Vanna 2014
94. Limitations of five forces model
• Industry often difficult to identify.
• Does not account for the role of strategic
alliances/partnerships( unsuccessful )
• Some firms, most notably large ones, can often
take steps to modify the industry structure
• Firms compete in many industries and markets
and must be concerned with multiple industry
structures.
• Assumes industry factors, not firm resources,
comprise the primary determinants of firm profit.
Dr. Phea Vanna 2010
95. Porter’s five forces model of industry competition
Dr. Phea Vanna 2010
Exhibit 2.2
Barriers to Entry
Proprietary learning curve
Absolute cost advantages
Access to inputs
Access to distribution
Economies of scale_ i.e., the most cost
efficient level of production are at minimum
Government policy
Capital requirements
Brand identity
Switching costs
Expected retaliation(repayment)
Proprietary(owner) products
Switching costs
Buyer inclination(наклонение) to
substitute(e.g., shifts in consumer tastes away from the
firm's products or more alternatives)
Price-performance trade-off of substitutes
Changing prices - raising or lowering prices to gain a
temporary advantage
Supplier concentration*(percentage of market share
owned by the firms. e.g.,)
Importance of volume to supplier(e.g.,Rus gas sold to
China)
Differentiation of inputs(e.g.,Brand identification)
Impact of inputs on cost or differentiation
Switching costs of firms in the industry
Presence of substitute inputs
Threat of forward integration
Cost relative to total purchases in industry
Bargaining leverage
Buyer volume
Buyer information
Brand identity
Price sensitivity
Threat of backward integration
Product differentiation
Buyer concentration vs. industry
Substitutes available
Buyers' incentives
96. Summary
• Environmental analysis a necessary
component of strategic planning
• Environmental awareness occurs through
scanning, monitoring, competitive
intelligence, environmental forecasting
• Two major components of environment
– General environment
– Competitive environment
Dr. Phea Vanna 2010
Editor's Notes
The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection.
Market share often is associated with profitability and thus many firms seek to increase their sales relative to competitors. Here are some specific reasons that a firm may seek to increase its market share:
Economies of scale - higher volume can be instrumental in developing a cost advantage.
Sales growth in a stagnant industry - when the industry is not growing, but the firm still can grow its sales by increasing its market share.
Reputation - market leaders have clout(influence) that they can use to their advantage.
Increased bargaining power - a larger player has an advantage in negotiations with suppliers and channel members.
The visionary goals are the lofty objectives that the firm's management decides to pursue. This vision describes some milestone that the firm will reach in the future and may require a decade or more to achieve. These visionary goals are longer term and more challenging than strategic or tactical goals. There may be only a 50% chance of realizing the vision, but the firm must believe that it can do so.
Most visionary goals fall into one of the following categories:
Target - quantitative or qualitative goals such as a sales target or Ford's goal to "democratize the automobile."
Common enemy - centered on overtaking a specific firm such as the 1950's goal of Philip-Morris to displace RJR(Компания по производству и обработке продуктов питания.).
Role model - to become like another firm in a different industry or market.
For example, a cycling accessories firm might strive to become "the Nike of the cycling industry."
Internal transformation - especially appropriate for very large corporations. For example, GE set the goal of becoming number one or
number two in every market it serves.
A corporate merger is the combination of the assets and liabilities of two firms to form a single business entity. In everyday language, the term acquisition tends to be used when a larger firm absorbs a smaller firm, and merger tends to be used when the combination is portrayed to be between equals. In a merger of firms that are approximate equals, there often is an exchange of stock in which
one firm issues new shares to the shareholders of the other firm at a certain ratio. For the sake of this discussion, the firm whose shares continue to exist (possibly under a different company name) will be referred to as the acquiring firm and the firm whose shares are being replaced by the acquiring firm will be referred to as the target firm.
to cluster together — собираться вместе
Surveillance_наблюдение
Cambodian poverty Data:
1.WB_ lower & upper line poverty in 2011(relist 2013)=11,1mln persons(85%_ income=$1.25 to $2.3/per day) & (15% high wealth ranking)
2.Camgovern-t statistic(relist 2013)_ wealth ranking lower & upper line poverty=51.2%/100persons
3.ASEAN(2011-2012)_less than $2 (57.8%) (ASEAN =lower=100m persons& upper =200m persons)
4. Camgovern-t statistic(2010)_Nutrition= 55%(ស្លេកស្លាំងចាប់ពីអាយុ 5>ហើយក្រិន40%)
5.Cam-ladies (age 15 to 49 year old)= 44%(ស្លេកស្លាំង) &57.1%`(មានផ្ទៃពោះស្លេកស្លាំង)
6. Camgovern-t statistic_child(6 to 14 year old)=45% (contribute economic activity) &(16%_child labour)
Source UNFPA (2013)_ Cam-immigrant to Thai =81%(95% illegal immigrant)
GDP - composition by sector _ agriculture: 36% ,industry: 24.3% and services: 39.7% (2012 est.)
Labor force (7.9 million (2011 est.)- by occupation _ agriculture: 55.8% industry: 16.9% and services: 27.3% (2010 est.)
The number of people entering the labor market every year is 300,000-400,000.
Literacy(competence) rates are good indicators for access to employment and higher incomes. According to UNESCO, only 1.6% of Cambodia’s GDP is spent on education – ranking around 170th in the world. Education statistics are improving but still low according to world standards.
Resources are the firm-specific assets useful for creating a cost or differentiation advantage and that few competitors can acquire easily. The
following are some examples of such resources:
Patents and trademarks
Proprietary know-how
Installed customer base
Reputation of the firm
Brand equity
Capabilities refer to the firm's ability to utilize its resources effectively. An example of a capability is the ability to bring a product to market faster than competitors. Such capabilities are embedded in the routines of the organization and are not easily documented as procedures and thus are difficult for competitors to replicate.
The firm's resources and capabilities together form its distinctive competencies. These competencies enable innovation, efficiency, quality, and customer responsiveness, all of which can be leveraged to create a cost advantage or a differentiation advantage.
Value Chain Analysis
In order to better understand the activities leading to a competitive advantage, one can begin with the generic value chain and then identify the relevant firm-specific activities. Process flows can be mapped, and these flows used to isolate the individual value-creating activities.
Once the discrete activities are defined, linkages between activities should be identified. A linkage exists if the performance or cost of one activity affects that of another. Competitive advantage may be obtained by optimizing and coordinating linked activities.
The value chain also is useful in outsourcing decisions. Understanding the linkages between activities can lead to more optimal make-or-buy decisions that can result in either a cost advantage or a differentiation advantage.
quantitative analysis _количественный анализ [анализ явления с целью определения его количественных характеристик(events & trends)]
A business case is a presentation urging(настаивать) management to do something, typically to invest in a new product. We will hope that your management honestly wants information to decide whether such a case is valid, rather than already having a conclusion and just wanting support.
Creating a Competitive Intelligence Unit takes time, patience(терпение), and thought(idea)
Understanding the process is critical:
The Need(number of competitors, market prices and Win rate)
The Idea(Strategic planning)
The Solution(alternatives) with CBA
The Result( Balancing ,preparing and strategic actions )
Competitive intelligence should be critical to business planning(Understanding the process is critical :The Need, The Idea, The Solution and The Result).
Finding out information for business planning.
Information asymmetry occurs when one party to a transaction has more or better information than the other party. E.,g., the seller knows more about the product than the buyer, however, the reverse can also be true.( or the seller of a used car knows more about its quality than buyer)
Environmental Scanning
Data Profession
Data Providers (producers and distributors)
Educational Sector
Research Community
Technology
External Factors (larger societal issues – confidentiality, trust)
International Factors
contingency plan_ disaster recovery plan чрезвычайный план (предопределённый план действий в аварийных ситуациях, включающий в себя процедуры резервного копирования и подготовку резервного оборудования для преодоления чрезвычайной ситуации)
Kodak _г. Pочестер, шт. Нью-Йорк. Слово "кодак" было придумано Дж. Eastman, George в 1888 при выпуске на рынок первой массовой фотокамеры, по замыслу автора оно должно было одинаково звучать на всех языках & (крупная компания по производству кинофотоаппаратуры и сопутствующих товаров. Основана в 1898)
Adding reference
Opportunities
The external environmental analysis may reveal certain new opportunities for profit and growth. Some examples of such opportunities include:
an unfulfilled customer need
arrival of new technologies
loosening of regulations
removal of international trade barriers
Threats
Changes in the external environmental also may present threats to the firm. Some examples of such threats include:
shifts in consumer tastes away from the firm's products
emergence of substitute products
new regulations
increased trade barriers
Economic factors affect the purchasing power of potential customers and the firm's cost of capital. The following are examples of factors in the macroeconomy:
economic growth
interest rates
exchange rates
inflation rate
Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Some technological factors include:
R&D activity
automation
technology incentives
rate of technological change
Cam-GDP composition: 24% Industry sector contributed to GDP,2013{during 1998 to 2013 increased at an average 12.4%, compared to agriculture sector(4.7%) and services sector(8.5% )}.
វិស័យឧស្សាហកម្មមានកំណើន ១១.៧ ភាគរយកាលពីឆ្នាំ២០១៥ ដែលរួមចំណែកធំជាងគេក្នុងកំណើនផលិតផលក្នុងស្រុកសរុប(GDP) ។ កំណើនបានមកពីការកើនឡើងការនាំចេញទំនិញ ក្នុងកម្រិតប្រហែល១៤.១២ភាគរយ ដែលស្មើនឹង៨.៥ពាន់លានដុល្លារ ក្នុងឆ្នាំ២០១៥ ព្រមទាំងការកើនឡើងចំនួន១០.២ភាគរយនៃការដឹកជញ្ជូនផលិតផលវាយនភណ្ឌនិងស្បែកជើង ដែលរួមចំណែកដល់ទៅ៧០ភាគរយនៃការនាំចេញទាំងអស់។
លើសពីនេះ កំណើនដ៏ខ្លាំងនៃសេដ្ឋកិច្ចកម្ពុជា មិនមែនដោយសារតែឧស្សាហកម្មតែមួយនោះទេ។ វិស័យសេវាកម្មស្ថិតនៅលំដាប់ទីពីរក្នុងការជំរុញកំណើនសេដ្ឋកិច្ចនេះ ដោយវាមានកំណើនប្រមាណ៧.១ភាគរយ។ វិស័យផ្សេងទៀតដូចជា ធនាគារ ហិរញ្ញវត្ថុ ការដឹកជញ្ជូននិងទូរគមនាគមន៍ មានកំណើនប្រហែល ៨ ភាគរយ ខណៈដែលការមកដល់នៃទេសចរកើន ៦.១ភាគរយ ក្នុងឆ្នាំ២០១៥។
ស្របពេលជាមួយគ្នានោះ វិស័យកសិកម្មក៏មានកំណើនបន្តិចផងដែរ ដ្បិតបាតុភូត El Nino នៅបន្តជះឥទ្ធិពលនៅឡើយ។ តែរំពឹងថា វានឹងមានកំណើនកម្រិត១.៦ភាគរយ នៅឆ្នាំក្រោយ។
Source UNFPA (2013)_ Cam-immigrant to Thai =81%(95% illegal immigrant)
ADB Predicts GDP Growth of 7.2% in 2013
The Asian Development Bank (ADB) on Wednesday maintained its projection that economic growth in Cambodia would reach 7.2 percent this year, despite some concerns among economists that foreign investment could take a hit if the current political deadlock is not resolved quickly.
In its periodic review of the economy, the ADB said that strong growth in the garment and construction sectors would lead to an even stronger gross domestic product (GDP) rate of 7.5 percent in 2014.
According to the report, exports of garments and footwear to the U.S. and the European Union increased by 11.3 percent to $2.3 billion during the first six months of the year compared to the same period in 2012, while exports of milled rice doubled to $122 million.
“Approvals for construction projects went up sharply to $1.9 billion during the same period, whereas credit for the construction sector grew by 46 percent in June from a year earlier,” the ADB said in a statement.
The economic update also showed that tourist arrivals reached 2.1 million in the first six months, up by 19.1 percent from the previous year. In 2013, the service sector as a whole is projected to grow by 7 percent and agricultural output by about 4 percent.
The projected growth rate gave Cambodia the highest GDP rate in the region apart from Laos, where GDP growth is estimated to reach 7.6 percent this year.
“In the past few years, the economy has seen quite a lot of changes in the existing sectors that contribute to the resilience of Cambodia to external shocks, as well as maintaining competitiveness in response to changes in the global business climate,” said Peter Brimble, senior country economist for the ADB.
“First, agriculture has started to increase levels of processing; second, the garment sector has begun to move up the value-added chain with new entrants from China, Thailand, Europe and Vietnam producing increasingly sophisticated products; and third, the tourism sector is attracting increasing numbers of visitors from Asia, not to mention higher spending tourists from the west.”
The report also states agricultural output is expected to rise, as long as the rainy season does not cause severe flooding of crops.
“Weather was generally favorable for agriculture in the first half and, assuming no severe droughts or floods over the rest of 2013, agricultural output is expected to increase by about 4 percent,” it states.
Flooding is currently affecting farmland in 10 provinces, though the amount of damage to this year’s rice harvest is not yet known.
Cambodia’s economic recovery is underway after a setback(regress) in 2009. GDP growth is projected to reach 4.9 percent in 2010 and 6.0(IMF=7.8%) in 2011 driven by a rebound in exports (particularly garments) and tourism, and the uninterrupted growth of agricultural production. Apparel exports rose by 15 percent over the first six months of 2010,reflecting growing personal consumption expenditures in the US (crucial garment market for Cambodia), with 16,000 new jobs created since January 2010 (after a loss of 43,000 (70,000)jobs in 2009). Garment export is expected to post a 14 percent growth in 2010. Tourism also picked up by 12 percent in the first half and is projected to grow by 9 percent for the 2010. The recovery is also visible in credit to private sector (up 17 percent) and new firm registration (up 21 percent in the first half of the year). The recovery of remains at a much slower motion, construction and FDI permit approvals remained foreign investment and construction subdued(подчинённый) despite a slight increase of imports of construction materials (up by 5 percent) suggesting that recovery took place in small construction activities only.
cost of capital _стоимость капитала (стоимость привлечения капитала из того или иного источника; измеряется ставкой процента, выплачиваемой по привлеченному капиталу, т. е. уровнем доходности, при котором инвесторы согласны вкладывать капитал в данную деятельность; исходя из стоимости привлечения инвестируемого капитала определяется минимальная норма доходности, при которой инвестиционный проект может быть принят к реализации) See: weighted average cost of capital , cost of debt , cost of preferred stock , cost of common equity , marginal cost of capital , divisional cost of capital , opportunity cost of capital , interest rate , hurdle rate
BRICS : Brazil, Russia, India, China and South Africa : seen collectively as the most important emerging economies with large potential markets
Cam-GDP composition: 24% Industry sector contributed to GDP,2013(during 1998 to 2013 increased at an average 12.4%, compared to 4.7% agriculture sector and 8.5% services sector )
Source UNFPA (2013)_ Cam-immigrant to Thai =81%(95% illegal immigrant)
ADB Predicts GDP Growth of 7.2% in 2013
The Asian Development Bank (ADB) on Wednesday maintained its projection that economic growth in Cambodia would reach 7.2 percent this year, despite some concerns among economists that foreign investment could take a hit if the current political deadlock is not resolved quickly.
In its periodic review of the economy, the ADB said that strong growth in the garment and construction sectors would lead to an even stronger gross domestic product (GDP) rate of 7.5 percent in 2014.
According to the report, exports of garments and footwear to the U.S. and the European Union increased by 11.3 percent to $2.3 billion during the first six months of the year compared to the same period in 2012, while exports of milled rice doubled to $122 million.
“Approvals for construction projects went up sharply to $1.9 billion during the same period, whereas credit for the construction sector grew by 46 percent in June from a year earlier,” the ADB said in a statement.
The economic update also showed that tourist arrivals reached 2.1 million in the first six months, up by 19.1 percent from the previous year. In 2013, the service sector as a whole is projected to grow by 7 percent and agricultural output by about 4 percent.
The projected growth rate gave Cambodia the highest GDP rate in the region apart from Laos, where GDP growth is estimated to reach 7.6 percent this year.
“In the past few years, the economy has seen quite a lot of changes in the existing sectors that contribute to the resilience of Cambodia to external shocks, as well as maintaining competitiveness in response to changes in the global business climate,” said Peter Brimble, senior country economist for the ADB.
“First, agriculture has started to increase levels of processing; second, the garment sector has begun to move up the value-added chain with new entrants from China, Thailand, Europe and Vietnam producing increasingly sophisticated products; and third, the tourism sector is attracting increasing numbers of visitors from Asia, not to mention higher spending tourists from the west.”
The report also states agricultural output is expected to rise, as long as the rainy season does not cause severe flooding of crops.
“Weather was generally favorable for agriculture in the first half and, assuming no severe droughts or floods over the rest of 2013, agricultural output is expected to increase by about 4 percent,” it states.
Flooding is currently affecting farmland in 10 provinces, though the amount of damage to this year’s rice harvest is not yet known.
Cambodia’s economic recovery is underway after a setback(regress) in 2009. GDP growth is projected to reach 4.9 percent in 2010 and 6.0(IMF=7.8%) in 2011 driven by a rebound in exports (particularly garments) and tourism, and the uninterrupted growth of agricultural production. Apparel exports rose by 15 percent over the first six months of 2010,reflecting growing personal consumption expenditures in the US (crucial garment market for Cambodia), with 16,000 new jobs created since January 2010 (after a loss of 43,000 (70,000)jobs in 2009). Garment export is expected to post a 14 percent growth in 2010. Tourism also picked up by 12 percent in the first half and is projected to grow by 9 percent for the 2010. The recovery is also visible in credit to private sector (up 17 percent) and new firm registration (up 21 percent in the first half of the year). The recovery of remains at a much slower motion, construction and FDI permit approvals remained foreign investment and construction subdued(подчинённый) despite a slight increase of imports of construction materials (up by 5 percent) suggesting that recovery took place in small construction activities only.
http://www.indexmundi.com/factbook/compare/cambodia.vietnam/economy
A large percentage of migrant men were engaged in construction while 58.5% of women migrated to Phnom Penh for work in garment factories (32.2%), small business (23.4%), domestic work (11.1%), and service/entertainment sector (10.3%) (MOP, 2013b, p. xi).
Cam-Population_14,952,665 (July 2012 est.)_Khmer 90%, Vietnamese 5%, Chinese 1%, other 4%
Age structure:
0-14 years: 31.7% (male 2,428,507/female 2,397,327) 15-24 years: 21.2% (male 1,597,990/female 1,627,161) 25-54 years: 38.2% (male 2,828,752/female 2,985,226) 55-64 years: 4.9% (male 287,073/female 464,991) 65 years and over: 3.9% (male 221,356/female 367,156) (2013 est.)
More than 50% of the population is less than 25 years old ( 15-64 years: 64%)
By 2013, about 25% (or 3,705,253 people )of the Cambodian population had migrated and 85% of the urban migrants came from rural areas.
urban population: 20% of total population (2011) and rate of urbanization: 2.13% annual rate of change (2010-15 est.)
Disparities between rural and urban areas_ Approximately 4 million people live on less than $1.25 per day, and 37% of Cambodian children under the age of 5 suffer from chronic malnutrition.
1.WB_ below & upper poverty line in 2011(relist 2013)=11,1mln person(85%_ income=$1.25 to $2.3/per day) & (15%) high wealth ranking
3.ASEAN(2011-2012)_less than $2 (57.8%=8.7mln)
4. Camgovern-t statistic(2010)_nutrition= 55%(ស្លេកស្លាំងចាប់ពីអាយុ 5>ហើយក្រិន40%)
5.Cam-ladies (age 15 to 49 year old)= 44%(ស្លេកស្លាំង) &57.1%`(មានផ្ទៃពោះស្លេកស្លាំង)
6. Camgovern-t statistic_child(6 to 14 year old)=45%(contribute economic activity) &(16%_child labour)
Source: (NIS, 2012, pp. 29-30)
key demographic data for urban and rural areas. Urban populations are more educated, have better accessibility to amenities, lower rate of infant and under-5 mortality, and better life expectancy than rural populations. The latter, on the other hand, have higher labor force participation, lower unemployment rate, and higher fertility rate. Remote provinces like Koh Kong, Stung Treng, Preah Vihear , Ratanakiri, Kratie, Modulkiri, Otdar Meanchey, and Kampong Speu were seriously lagging behind with rates of fertility, mortality, female illiteracy, and predictive poverty level higher than the national average (MOP, 2013c, pp. 7-8).
1.Surface water_ наземная, поверхностная вода
2.Piped water_ водопроводная вода
Water is Vital_ The average American uses about 190 liters of water each day. To function properly, the body requires between one and seven litres of water per day to avoid dehydration; the precise amount depends on the level of activity, temperature, humidity, and other factors. The world is facing a water crisis as population expands and pollution increases. The World Health Organization estimates that more than 1 billion people lack access to safe drinking water, and that about 4000 children die every day from water borne diseases.
key demographic data for urban and rural areas. Urban populations are more educated, have better accessibility to amenities, lower rate of infant and under-5 mortality, and better life expectancy than rural populations. The latter, on the other hand, have higher labor force participation, lower unemployment rate, and higher fertility rate. Remote provinces like Koh Kong, Stung Treng, Preah Vihear , Ratanakiri, Kratie, Modulkiri, Otdar Meanchey, and Kampong Speu were seriously lagging behind with rates of fertility, mortality, female illiteracy, and predictive poverty level higher than the national average (MOP, 2013c, pp. 7-8).
Cambodian Poverty declined from 47.8% in 2007 to 19.8% in 2011
Rates of poverty are significantly higher in rural areas than in urban areas (The World Bank, 2006). For instance, the 2009 Cambodia Socio-Economic Survey (CSES) indicated that while the national poverty rate was 22.9%, rural areas had a much higher rate compared to Phnom Penh and other urban areas (24.6% rural, 12.8% Phnom Penh, 19.3% other urban areas) (see also Aumporn, 20 March 2013).
Source MoP: Enterprise Cesus2011_Other provinces are Kompong Cham, Kompong Speu , Sihanouk ville and Sveay Rieng
Industry sector is main fundamental of creating jobs: 1993, 72% agriculture sector and only 5% industry sector. 2008 census founded rose to 8.6%(600000 workers) of totally workers and 2012 in this sector increase to18.6%(1.4 million workers), but in the hot season(summer) rose to 25.2%(1.8 million workers)
GDP - composition by sector _ agriculture: 36% ,industry: 24.3% and services: 39.7% (2012 est.)
Labor force (7.9 million (2011 est.)- by occupation _ agriculture: 55.8% industry: 16.9% and services: 27.3% (2010 est.)
GDP - composition by sector: agriculture: 4% ,industry: 24.6% ,services: 71.4% (Australia,2011 est.)
GDP (purchasing power parity): $1.4 trillion (Australia,2011 est.)&GDP (purchasing power parity): $2.38 trillion (Russia,2011 est.) _A nation's GDP at purchasing power parity (PPP) exchange rates is the sum value of all goods and services produced in the country valued at prices prevailing in the United States. This is the measure most economists prefer when looking at per-capita welfare and when comparing living conditions or use of resources across countries.
http://www.indexmundi.com/factbook/compare/cambodia.vietnam/economy
A large percentage of migrant men were engaged in construction while 58.5% of women migrated to Phnom Penh for work in garment factories (32.2%), small business (23.4%), domestic work (11.1%), and service/entertainment sector (10.3%) (MOP, 2013b, p. xi).
strikebreaker _ а) (член профсоюза, который отказывается бастовать) б) (человек, который нанят для замены бастующего работника; наем штрейкбрехера является одним из основных методов борьбы работодателя с забастовками)
Free market economy: production of goods and services is in private ownership.
Production is dictated by supply and demand.
Command economy: decisions on what to produce, how much, done by the government.
Most command economies are moving away from the command economy.
Mixed economy: certain economic sectors controlled by private business, others are government controlled.
Many mixed countries are moving toward a free enterprise system.(e.g. Privatization in Cambodia )
Deng Xiaoping became the most powerful leader in the People's Republic of China (PRC) in the 1970s. He served as the chairman of the Communist Party's Military Commission and was the chief architect of China's economic improvements during the 1980s.
Born: August 22, 1904 ,Guangan, Sichuan Province, China & Died: February 19, 1997 Peking, China
Doi Moi reform(VN)-The idea of Doi Moi originated from seeing the negative results of suppressing some spontaneous war-time experiments. Thus it was that the VCP's Sixth National Congress in December of 1986 acknowledged that the economic model followed since 1954 had failed. In 1988 there were major policies initiated which moved the system toward a market economy.
The Current Economy
In the twenty-first century some of Vietnam's problems are being solved. Between 1995 and 2004 Vietnam grew at a rate of about 7.5 percent per year and this rate is second only to that of China. This period included the years of the Asian financial crisis. It also included the period of the collapse of the Soviet Union and the decline in foreign from that source. The recent years look even better. Vietnam's foreign trade is on the order of $20 billion per year whereas its total foreign aid is only about $2 billion per year. In 2003 Vietnam took in foreign investment equal to 8 percent of its GDP. This is a higher proportion of foreign investment than China got.
Vietnam's trade with the U.S. is growing after a trade pact was agreed upon in 2002. However some elements of the trade is running into protectionist legislation in the U.S. The export of catfish to the U.S. from Vietnam was restricted by a high tariff invoked by U.S. catfish farmers. The textile industry in Vietnam received a quota for exports to the U.S. and the textile trade grew from $47 million in 2001 to $2.4 billion in 2003. However once the quota is filled the growth will thereafter be limited to a few percent per year.
China Vs. US——
2010: GDP: $6.12 trillion (the US GDP: 14 .2 trillion dollars in 2008, The Gross Domestic Product (GDP) in the United States was worth 15094.00 billion US dollars in 2011, according to a report published by the World Bank. The GDP value of the United States is roughly equivalent to 24.35 percent of the world economy). Needs 2-3 more double time to catch up the GDP of the US(i.e. 16-24 years).
“China’s GDP could be 2.5 times that of the US by 2030” — Justin Lin Yifu
outlook of China’s economy in 2011(Summary:China's gross domestic product (GDP) registered a year-on-year increase of 9.2 percent reaching 47.16 trillion yuan (approximately 7 trillion US dollars) over the course of 2011, the National Bureau of Statistics (NBS) announced earlier this morning.): Economic growth: 9%, Inflation: 4.2%
Current Situation_Performance in 1st quarter, 2011
— Economic growth: +9.7%(1st Q)
— Consumer Price Index:5.0 % (1st Q)
— International trade: trade: 800.3 billion, export:+26.5%, import: 32.6%,deficit: US$1 billion
— Fixed assets investment:+25%(1st Q)
— Consumption: +16.3%(1st Q)
Cam-GDP composition: 24% Industry sector contributed to GDP,2013{during 1998 to 2013 increased at an average 12.4%, compared to agriculture sector(4.7%) and services sector(8.5% )}.
(11.7%)វិស័យឧស្សាហកម្មមានកំណើន១១.៧ភាគរយកាលពីឆ្នាំ២០១៥ ដែលរួមចំណែកធំជាងគេក្នុងកំណើនផលិតផលក្នុងស្រុកសរុប(GDP) ។ កំណើនបានមកពីការកើនឡើងការនាំចេញទំនិញ ក្នុងកម្រិតប្រហែល១៤.១២ភាគរយ ដែលស្មើនឹង៨.៥ពាន់លានដុល្លារ ក្នុងឆ្នាំ២០១៥ ព្រមទាំងការកើនឡើងចំនួន១០.២ភាគរយនៃការដឹកជញ្ជូនផលិតផលវាយនភណ្ឌនិងស្បែកជើង(10.2%) ដែលរួមចំណែកដល់ទៅ៧០ភាគរយនៃការនាំចេញទាំងអស់។ លើសពីនេះ កំណើនដ៏ខ្លាំងនៃសេដ្ឋកិច្ចកម្ពុជា មិនមែនដោយសារតែឧស្សាហកម្មតែមួយនោះទេ។ វិស័យសេវាកម្ម(7.1%)ស្ថិតនៅលំដាប់ទីពីរក្នុងការជំរុញកំណើនសេដ្ឋកិច្ចនេះ ដោយវាមានកំណើនប្រមាណ ៧.១ភាគរយ។ វិស័យផ្សេងទៀតដូចជា ធនាគារ ហិរញ្ញវត្ថុ ការដឹកជញ្ជូននិងទូរគមនាគមន៍ មានកំណើនប្រហែល ៨ ភាគរយ ខណៈដែលការមកដល់នៃទេសចរកើន ៦.១ភាគរយ ក្នុងឆ្នាំ២០១៥។ ស្របពេលជាមួយគ្នានោះ វិស័យកសិកម្ម(1.6%)ក៏មានកំណើនបន្តិចផងដែរ ដ្បិតបាតុភូត El Nino នៅបន្តជះឥទ្ធិពលនៅឡើយ។ តែរំពឹងថា វានឹងមានកំណើនកម្រិត១.៦ភាគរយ នៅឆ្នាំក្រោយ។
Source UNFPA (2013)_ Cam-immigrant to Thai =81%(95% illegal immigrant)
ADB Predicts GDP Growth of 7.2% in 2013
The Asian Development Bank (ADB) on Wednesday maintained its projection that economic growth in Cambodia would reach 7.2 percent this year, despite some concerns among economists that foreign investment could take a hit if the current political deadlock is not resolved quickly.
In its periodic review of the economy, the ADB said that strong growth in the garment and construction sectors would lead to an even stronger gross domestic product (GDP) rate of 7.5 percent in 2014.
According to the report, exports of garments and footwear to the U.S. and the European Union increased by 11.3 percent to $2.3 billion during the first six months of the year compared to the same period in 2012, while exports of milled rice doubled to $122 million.
“Approvals for construction projects went up sharply to $1.9 billion during the same period, whereas credit for the construction sector grew by 46 percent in June from a year earlier,” the ADB said in a statement.
The economic update also showed that tourist arrivals reached 2.1 million in the first six months, up by 19.1 percent from the previous year. In 2013, the service sector as a whole is projected to grow by 7 percent and agricultural output by about 4 percent.
The projected growth rate gave Cambodia the highest GDP rate in the region apart from Laos, where GDP growth is estimated to reach 7.6 percent this year.
“In the past few years, the economy has seen quite a lot of changes in the existing sectors that contribute to the resilience of Cambodia to external shocks, as well as maintaining competitiveness in response to changes in the global business climate,” said Peter Brimble, senior country economist for the ADB.
“First, agriculture has started to increase levels of processing; second, the garment sector has begun to move up the value-added chain with new entrants from China, Thailand, Europe and Vietnam producing increasingly sophisticated products; and third, the tourism sector is attracting increasing numbers of visitors from Asia, not to mention higher spending tourists from the west.”
The report also states agricultural output is expected to rise, as long as the rainy season does not cause severe flooding of crops.
“Weather was generally favorable for agriculture in the first half and, assuming no severe droughts or floods over the rest of 2013, agricultural output is expected to increase by about 4 percent,” it states.
Flooding is currently affecting farmland in 10 provinces, though the amount of damage to this year’s rice harvest is not yet known.
Cambodia’s economic recovery is underway after a setback(regress) in 2009. GDP growth is projected to reach 4.9 percent in 2010 and 6.0(IMF=7.8%) in 2011 driven by a rebound in exports (particularly garments) and tourism, and the uninterrupted growth of agricultural production. Apparel exports rose by 15 percent over the first six months of 2010,reflecting growing personal consumption expenditures in the US (crucial garment market for Cambodia), with 16,000 new jobs created since January 2010 (after a loss of 43,000 (70,000)jobs in 2009). Garment export is expected to post a 14 percent growth in 2010. Tourism also picked up by 12 percent in the first half and is projected to grow by 9 percent for the 2010. The recovery is also visible in credit to private sector (up 17 percent) and new firm registration (up 21 percent in the first half of the year). The recovery of remains at a much slower motion, construction and FDI permit approvals remained foreign investment and construction subdued(подчинённый) despite a slight increase of imports of construction materials (up by 5 percent) suggesting that recovery took place in small construction activities only.
cost of capital _стоимость капитала (стоимость привлечения капитала из того или иного источника; измеряется ставкой процента, выплачиваемой по привлеченному капиталу, т. е. уровнем доходности, при котором инвесторы согласны вкладывать капитал в данную деятельность; исходя из стоимости привлечения инвестируемого капитала определяется минимальная норма доходности, при которой инвестиционный проект может быть принят к реализации) See: weighted average cost of capital , cost of debt , cost of preferred stock , cost of common equity , marginal cost of capital , divisional cost of capital , opportunity cost of capital , interest rate , hurdle rate
Cam-GDP composition: 24% Industry sector contributed to GDP,2013{during 1998 to 2013 increased at an average 12.4%, compared to agriculture sector(4.7%) and services sector(8.5% )}.GDP, 2015: Industry_ 11.7%(export_14,1%{8.5b} & textile_10.2% ), Agriculture_1.6% and Service_7.6%(bank, transport& telecommunications =8% , and Tourist _6.1%)
(11.7%)វិស័យឧស្សាហកម្មមានកំណើន១១.៧ភាគរយកាលពីឆ្នាំ២០១៥ ដែលរួមចំណែកធំជាងគេក្នុងកំណើនផលិតផលក្នុងស្រុកសរុប(GDP) ។ កំណើនបានមកពីការកើនឡើងការនាំចេញទំនិញ ក្នុងកម្រិតប្រហែល១៤.១២ភាគរយ ដែលស្មើនឹង៨.៥ពាន់លានដុល្លារ ក្នុងឆ្នាំ២០១៥ ព្រមទាំងការកើនឡើងចំនួន១០.២ភាគរយនៃការដឹកជញ្ជូនផលិតផលវាយនភណ្ឌនិងស្បែកជើង(10.2%) ដែលរួមចំណែកដល់ទៅ៧០ភាគរយនៃការនាំចេញទាំងអស់។ លើសពីនេះ កំណើនដ៏ខ្លាំងនៃសេដ្ឋកិច្ចកម្ពុជា មិនមែនដោយសារតែឧស្សាហកម្មតែមួយនោះទេ។ វិស័យសេវាកម្ម(7.1%)ស្ថិតនៅលំដាប់ទីពីរក្នុងការជំរុញកំណើនសេដ្ឋកិច្ចនេះ ដោយវាមានកំណើនប្រមាណ ៧.១ភាគរយ។ វិស័យផ្សេងទៀតដូចជា ធនាគារ ហិរញ្ញវត្ថុ ការដឹកជញ្ជូននិងទូរគមនាគមន៍ មានកំណើនប្រហែល ៨ ភាគរយ ខណៈដែលការមកដល់នៃទេសចរកើន ៦.១ភាគរយ ក្នុងឆ្នាំ២០១៥។ ស្របពេលជាមួយគ្នានោះ វិស័យកសិកម្ម(1.6%)ក៏មានកំណើនបន្តិចផងដែរ ដ្បិតបាតុភូត El Nino នៅបន្តជះឥទ្ធិពលនៅឡើយ។ តែរំពឹងថា វានឹងមានកំណើនកម្រិត១.៦ភាគរយ នៅឆ្នាំក្រោយ។
Source UNFPA (2013)_ Cam-immigrant to Thai =81%(95% illegal immigrant)
2011 Inflation _Source: MoP=5.5%,2012 and 2013_2.9%, 2014=3.5% and 2015=3.5%
Inflation picked up to 4.7% at the end of 2013, mainly because customs duty collection was tightened, which raised some import prices. For the year, inflation averaged 2.9%, the same as in 2012.
Source MoP: Enterprise Cesus2011_Other provinces are Kompong Cham, Kompong Speu , Sihanouk ville and Sveay Rieng
Industry sector is main fundamental of creating jobs: in1993: 72% agriculture sector and only 5% industry sector. 2008 census founded rose to 8.6%(600000 workers) of totally workers and 2012 in this sector increase to18.6%(1.4 million workers), but in the hot season(summer) rose to 25.2%(1.8 million workers)
GDP - composition by sector _ agriculture: 36% ,industry: 24.3% and services: 39.7% (2012 est.)
Labor force (7.9 million (2011 est.)- by occupation _ agriculture: 55.8% industry: 16.9% and services: 27.3% (2010 est.)
GDP - composition by sector: agriculture: 4% ,industry: 24.6% ,services: 71.4% (Australia,2011 est.)
GDP (purchasing power parity): $1.4 trillion (Australia,2011 est.)&GDP (purchasing power parity): $2.38 trillion (Russia,2011 est.) _A nation's GDP at purchasing power parity (PPP) exchange rates is the sum value of all goods and services produced in the country valued at prices prevailing in the United States. This is the measure most economists prefer when looking at per-capita welfare and when comparing living conditions or use of resources across countries.
According to the report, exports of garments and footwear to the U.S. and the European Union increased by 11.3 percent to $2.3 billion during the first six months of the year compared to the same period in 2012, while exports of milled rice doubled to $122 million.
“Approvals for construction projects went up sharply to $1.9 billion during the same period, whereas credit for the construction sector grew by 46 percent in June from a year earlier,” the ADB said in a statement.
GDP - composition by sector: agriculture: 34.8% ,industry: 24.5% and services: 40.7% (2013 est.)
GDP - composition by sector: agriculture: 30% ,industry: 30% ,services: 40% (2011 est.)
វិស័យឧស្សាហកម្មមានកំណើន១១.៧ភាគរយកាលពីឆ្នាំ២០១៥ ដែលរួមចំណែកធំជាងគេក្នុងកំណើនផលិតផលក្នុងស្រុកសរុប(GDP) ។ កំណើនបានមកពីការកើនឡើងការនាំចេញទំនិញ ក្នុងកម្រិតប្រហែល១៤.១២ភាគរយ ដែលស្មើនឹង៨.៥ពាន់លានដុល្លារ ក្នុងឆ្នាំ២០១៥ ព្រមទាំងការកើនឡើងចំនួន១០.២ភាគរយនៃការដឹកជញ្ជូនផលិតផលវាយនភណ្ឌនិងស្បែកជើង ដែលរួមចំណែកដល់ទៅ៧០ភាគរយនៃការនាំចេញទាំងអស់។ លើសពីនេះ កំណើនដ៏ខ្លាំងនៃសេដ្ឋកិច្ចកម្ពុជា មិនមែនដោយសារតែឧស្សាហកម្មតែមួយនោះទេ។ វិស័យសេវាកម្មស្ថិតនៅលំដាប់ទីពីរក្នុងការជំរុញកំណើនសេដ្ឋកិច្ចនេះ ដោយវាមានកំណើនប្រមាណ៧.១ភាគរយ។ វិស័យផ្សេងទៀតដូចជា ធនាគារ ហិរញ្ញវត្ថុ ការដឹកជញ្ជូននិងទូរគមនាគមន៍ មានកំណើនប្រហែល ៨ ភាគរយ ខណៈដែលការមកដល់នៃទេសចរកើន ៦.១ភាគរយ ក្នុងឆ្នាំ២០១៥។ ស្របពេលជាមួយគ្នានោះ វិស័យកសិកម្មក៏មានកំណើនបន្តិចផងដែរ ដ្បិតបាតុភូត El Nino នៅបន្តជះឥទ្ធិពលនៅឡើយ។ តែរំពឹងថា វានឹងមានកំណើនកម្រិត១.៦ភាគរយ នៅឆ្នាំក្រោយ។
Cambodian Textile and Garment Exports(US=70%;EU=22-25%,& Canada,Japan &another market): Sources MIME & MOC_ 2001-2011 (US$ Million):1,156.84(2001);1,343.67(2002) ;1,609.69(2003) ;1,982.79(2004) ;2,190.31(2005) ; 2,651.51(2006); 2,866.32(2007); 2,971.00(2008); 2585(2009); 3126(2010); 3964(2011){2011/2010=27%}
Effects of the 2008-2009 Global Financial Crisis(Threats)
The global downturn depressed demand for garments, and exports declined by 19% in 2009, as the particularly hard hit United States remained such a key market.xii The government stated 73 garment factories closed in 2008 with a loss of about 25,000 jobs, but in the same year 64 new factories opened absorbing 13,000 workers. xiiiAs about 70% of its clothing exports go to the US and 25% to Europe, the crisis took its toll with about 100 factories closing in 2009.xiv The structure of the industry makes it susceptible to shocks in the global economy because it is so export-driven. Some 60% of the factories operate on a cut, make and trim basis as subsidiaries of foreign companies in China, Taiwan and South Korea.xv At the ASEAN Federation of Textile Industries meeting in Phnom Penh in January 2009, the Ministry of Commerce stated production had fallen 15-20% since October 2008. To keep jobs and exports steady, the government suspended (прекращать) a 1% Advance Profit Tax until the end of 2012 and also announced a subsidy for factories' payments to the National Social Security Fund. Cut, make and trim means the supplier controls the designs and fabrics used, but outsources the labor-intensive jobs.
Economic progress
As a whole, ASEAN’s recent economic performance has been remarkable. In 2013, ASEAN’s gross domestic product (GDP) stood at $2.4 trillion,
accounting for 3.3 percent of the world’s economy.
ADB Predicts GDP Growth of 7.2% in 2013
The Asian Development Bank (ADB) on Wednesday maintained its projection that economic growth in Cambodia would reach 7.2 percent this year, despite some concerns among economists that foreign investment could take a hit if the current political deadlock is not resolved quickly.
In its periodic review of the economy, the ADB said that strong growth in the garment and construction sectors would lead to an even stronger gross domestic product (GDP) rate of 7.5 percent in 2014.
According to the report, exports of garments and footwear to the U.S. and the European Union increased by 11.3 percent to $2.3 billion during the first six months of the year compared to the same period in 2012, while exports of milled rice doubled to $122 million.
“Approvals for construction projects went up sharply to $1.9 billion during the same period, whereas credit for the construction sector grew by 46 percent in June from a year earlier,” the ADB said in a statement.
The economic update also showed that tourist arrivals reached 2.1 million in the first six months, up by 19.1 percent from the previous year. In 2013, the service sector as a whole is projected to grow by 7 percent and agricultural output by about 4 percent.
The projected growth rate gave Cambodia the highest GDP rate in the region apart from Laos, where GDP growth is estimated to reach 7.6 percent this year.
“In the past few years, the economy has seen quite a lot of changes in the existing sectors that contribute to the resilience of Cambodia to external shocks, as well as maintaining competitiveness in response to changes in the global business climate,” said Peter Brimble, senior country economist for the ADB.
“First, agriculture has started to increase levels of processing; second, the garment sector has begun to move up the value-added chain with new entrants from China, Thailand, Europe and Vietnam producing increasingly sophisticated products; and third, the tourism sector is attracting increasing numbers of visitors from Asia, not to mention higher spending tourists from the west.”
The report also states agricultural output is expected to rise, as long as the rainy season does not cause severe flooding of crops.
“Weather was generally favorable for agriculture in the first half and, assuming no severe droughts or floods over the rest of 2013, agricultural output is expected to increase by about 4 percent,” it states.
Flooding is currently affecting farmland in 10 provinces, though the amount of damage to this year’s rice harvest is not yet known.
Cambodia’s economic recovery is underway after a setback(regress) in 2009. GDP growth is projected to reach 4.9 percent in 2010 and 6.0(IMF=7.8%) in 2011 driven by a rebound in exports (particularly garments) and tourism, and the uninterrupted growth of agricultural production. Apparel exports rose by 15 percent over the first six months of 2010,reflecting growing personal consumption expenditures in the US (crucial garment market for Cambodia), with 16,000 new jobs created since January 2010 (after a loss of 43,000 (70,000)jobs in 2009). Garment export is expected to post a 14 percent growth in 2010. Tourism also picked up by 12 percent in the first half and is projected to grow by 9 percent for the 2010. The recovery is also visible in credit to private sector (up 17 percent) and new firm registration (up 21 percent in the first half of the year). The recovery of remains at a much slower motion, construction and FDI permit approvals remained foreign investment and construction subdued(подчинённый) despite a slight increase of imports of construction materials (up by 5 percent) suggesting that recovery took place in small construction activities only.
ADS_(Automatic Distribution System) система автоматического распространения
NBC policy _3800 to 4200
Credit to the private sector expanded by a rapid 26.7% .Total liquidity (M2), excluding foreign currency outside the banking
system, rose by 14.6%. Dollarization remained high, with foreign currency deposits accounting for 82% of total liquidity.
Cambodia’s GDP growth rate (2010-2016):11,629(2010)=4.9% ;13,001(2011)=6% ;14,302(2012) ;15,798(2013);17,301(2014);19,098(2015); 21,081(2016).
In the twenty-first century some of Vietnam's problems are being solved. Between 1995 and 2004 Vietnam grew at a rate of about 7.5 percent per year . This period included the years of the Asian financial crisis(1998).
GDP - composition by sector: agriculture: 30% ,industry: 30% ,services: 40% (2011 est.)
Cambodian Textile and Garment Exports(US=70%;EU=22-25%,& Canada,Japan &another market): Sources MIME & MOC_ 2001-2011 (US$ Million):1,156.84(2001);1,343.67(2002) ;1,609.69(2003) ;1,982.79(2004) ;2,190.31(2005) ; 2,651.51(2006); 2,866.32(2007); 2,971.00(2008); 2585(2009); 3126(2010); 3964(2011){2011/2010=27%}
Effects of the 2008-2009 Global Financial Crisis(Threats)
The global downturn depressed demand for garments, and exports declined by 19% in 2009, as the particularly hard hit United States remained such a key market.xii The government stated 73 garment factories closed in 2008 with a loss of about 25,000 jobs, but in the same year 64 new factories opened absorbing 13,000 workers. xiiiAs about 70% of its clothing exports go to the US and 25% to Europe, the crisis took its toll with about 100 factories closing in 2009.xiv The structure of the industry makes it susceptible to shocks in the global economy because it is so export-driven. Some 60% of the factories operate on a cut, make and trim basis as subsidiaries of foreign companies in China, Taiwan and South Korea.xv At the ASEAN Federation of Textile Industries meeting in Phnom Penh in January 2009, the Ministry of Commerce stated production had fallen 15-20% since October 2008. To keep jobs and exports steady, the government suspended (прекращать) a 1% Advance Profit Tax until the end of 2012 and also announced a subsidy for factories' payments to the National Social Security Fund. Cut, make and trim means the supplier controls the designs and fabrics used, but outsources the labor-intensive jobs.
Tourism receipts(2009=2.2 m;2010=2.5m ;2011=2.9m & 2012est=3.3 million people) ,See into the report to council of Ministers by MOT
ក្នុងឆ្នាំ២០១១ ក្នលងមក្ទនុះ ទទស្ចរអនតរាតិមក្ទស្សនាក្មពុាមានចាំនួន ២.៨៨១.៦៦២ នាក្់ ទក្ើនទ ើង១៤,៩% ទធៀបនឹងឆ្នាំ២០១០។
ត្តមការស្ិក្ា និងវាយតាំនលរបស្់អនក្ជាំនាញទទស្ចរណ៍បានឲ្យដឹងថ្វ ឆ្នាំ ២០១១ ទនុះ :
- ចាំណូលពីវិស្័យទទស្ចរណ៍មានចាំនួនរបមាណ ១.៩១២ ោនដុោលរអាទមរិក្
- វិស្័យទទស្ចរណ៍ផតល់ការងារទដ្ឋយផ្ទទល់ជូនរបាពលរដឋរបមាណ ៣៥០.០០០ នាក្់
វិស្័យទទស្ចរណ៍រួមចាំខណក្របមាណ ១២% ននផលិតផលក្នុងស្រស្ុក្ស្រុប (GDP)
ខផនការយុទធសាស្រស្តទនុះបានចងាុលបងាាញថ្វ ក្មពុាទរោងទាក្់ទាញទទស្ចរអនតរាតិឲ្យបាន ៧ោននាក្់ និងទទស្ចរ ក្នុងស្រស្ុក្របមាណ ៨ - ១០ ោននាក្់ ទៅឆ្នាំ២០២០ ទហើយវិស្័យទនុះនឹងនាាំមក្នូវចាំណូលរបមាណា ៥០០០ោនដុោលរ ទៅក្នុងទស្ដឋក្ិចចាតិ និងផតល់ការងារជូនរបាពលរដឋរបមាណ ៨០០០០០នាក្់។
Source_ IMF:GDP per capita 2011(est)=$915 ,2012=$ 994 ,2013=$1,069, 2014=$1,150 ,2015=$1,241 U.S. ,
Classify GDP per capita by WB:
WB: Lower Income<1005 ;
Lower Middle Income>1006$ to 3975$,
Upper Middle Income>3976 to 12275$ and High Income>12276$)
A sewing operator in Cambodia makes on average $80 a month compared to $200 for a Chinese worker. These employees were surveyed in 2007, and the wage level has not changed since then.
The Garment Manufacturing Association of Cambodia (GMAC_400 factories , est.) reports a Chinese worker produces 100-120 shirts per hour, a Vietnamese worker makes 60-70 shirts per hour and a Cambodian worker produces 30-40 shirts per hour.
In 2003 Vietnam took in foreign investment equal to 8 percent of its GDP. This is a higher proportion of foreign investment than China got.
Vietnam's trade with the U.S. is growing after a trade pact was agreed upon in 2002. However some elements of the trade is running into protectionist legislation in the U.S. The export of catfish to the U.S. from Vietnam was restricted by a high tariff invoked by U.S. catfish farmers. The textile industry in Vietnam received a quota for exports to the U.S. and the textile trade grew from $47 million in 2001 to $2.4 billion in 2003. However once the quota is filled the growth will thereafter be limited to a few percent per year.
food processing industry — пищевая промышленность
Intra-ASEAN Integration
Cambodia stands to gain plenty(abundant) if ASEAN economic integration continues on course. The country already receives tax favors from the EU for using fabric from ASEAN members for its clothing, and elimination of most tariffs between ASEAN countries in 2010 should reduce the cost of fabric imports.
The era of trade liberalization, along with acknowledgment that fashion and value-added products provide the best returns, presents Cambodia a major challenge. International buyers now want “full service” from the first designer sketch to stock delivery to their warehouses. This can shorten lead time and lower costs for customers. But Cambodia’s industry cannot yet provide full service to buyers, as it mainly consists of low-skilled cut, make and trim laborers(состояние готовности). Through Source ASEAN Full Service Alliance (SAFSA) manufacturers in the region are able to form virtual vertical factories by combining downstream material suppliers with intermediate and upstream suppliers, mostly in different countries, to provide buyers full service and speed to market. This strategy has the potential to really aid Cambodia because it imports most of its fabric and has an abundant supply of cheap labor.
1996 the United States and the European Union granted the country most favored nation(MFN) and generalized system of preferences (GSP) trade privileges.
Cambodia stands to gain plenty(abundant benefits) if ASEAN economic integration continues on course. The country already receives tax favors from the EU for using fabric from ASEAN members for its clothing, and elimination of most tariffs between ASEAN countries in 2010 should reduce the cost of fabric imports.
Preferences_ преимущество (особые торговые преимущества, предоставляемые торговым партнерам из дружественных стран в целях развития экспорта).e.g., garment & textiles Sector(Cambodia preferences)
Managing Macroeconomic InterdependenceAsia’s macroeconomic interdependence is deepening (GDP growth, inflation….
Asia’s macroeconomic policies show little evidence of convergence(совмещение) (different monetary and fiscal policies and exchange rate systems)
Regional cooperation will be important for managing regional and global macroeconomic challenges (financial crisis and global payments imbalances)
There is a need to make macroeconomic consultation and surveillance more effective (establish an “ Asian Secretariat for Economic Cooperation” under ASEAN+3)
It is necessary to strengthen Asia’s short term financing facility (pooling the massive foreign exchange reserves and improving the rules under which they are used for effective crisis management – Multilateralizing the Chiang Mai Initiative)
It is also necessary to cooperate more in exchange rate and macroeconomic policies
Decline in unit costs(costs declined by 10% to 30%.) resulting from learning curve _firms acquire cost advantages are improving process efficiencies( through skill in designing products & high level of expertise in manufacturing process engineering… ), gaining unique access to a large source of lower cost materials, making optimal outsourcing and vertical integration decisions.
Two issues that should be considered when deciding whether to vertically integrate is cost and control. The cost aspect depends on the cost of market transactions (рыночные сделки)between firms versus the cost of administering the same activities internally within a single firm. The second issue is the impact of asset control, which can impact barriers to entry and which can assure cooperation of key value adding players.
In pursuing an advantage over its rivals, a firm can choose from several competitive moves:
Changing prices - raising or lowering prices to gain a temporary advantage(Industry's life cycle _Introduction & Growth period ).
Improving product differentiation - improving features, implementing innovations in the manufacturing process and in the product itself.
Creatively using channels of distribution - using vertical integration or using a distribution channel that is novel to the industry. For example, with high-end jewelry stores reluctant to carry its watches, Timex moved into drugstores and other non-traditional outlets and cornered the low to mid-price watch market.
Exploiting relationships with suppliers - for example, from the 1950's to the 1970's Sears, Roebuck and Co. dominated the retail household appliance market. Sears set high quality standards and required suppliers to meet its demands for product specifications and price.
The intensity of rivalry is influenced by the following industry characteristics:
1. A larger number of firms increases rivalry because more firms must compete for the same customers and resources. The rivalry intensifies if the firms have similar market share, leading to a struggle for market leadership.
2. Slow market growth causes firms to fight for market share. In a growing market, firms are able to improve revenues simply because of the expanding market.
3. High fixed costs result in an economy of scale effect that increases rivalry. When total costs are mostly fixed costs, the firm must produce near capacity to attain the lowest unit costs. Since the firm must sell this large quantity of product, high levels of production lead to a fight for market share and results in increased rivalry.
4. High storage costs or highly perishable products cause a producer to sell goods as soon as possible. If other producers are attempting
to unload at the same time, competition for customers intensifies.
5. Low switching costs increases rivalry. When a customer can freely switch from one product to another there is a greater struggle to capture customers.
6. Low levels of product differentiation is associated with higher levels of rivalry. Brand identification, on the other hand, tends to constrain rivalry.
7. Strategic stakes are high when a firm is losing market position or has potential for great gains. This intensifies rivalry.
8. High exit barriers place a high cost on abandoning the product. The firm must compete. High exit barriers cause a firm to remain in an industry, even when the venture is not profitable. A common exit barrier is asset specificity. When the plant and equipment required for manufacturing a product is highly specialized, these assets cannot easily be sold to other buyers in another industry. Litton Industries' acquisition of Ingalls Shipbuilding facilities illustrates this concept. Litton was successful in the 1960's with its contracts to build Navy ships. But when the Vietnam war ended, defense spending declined and Litton saw a sudden decline in its earnings. As the firm restructured, divesting from the shipbuilding plant was not feasible since such a large and highly specialized investment could not be sold easily, and Litton was forced to stay in a declining shipbuilding market.
9. A diversity of rivals with different cultures, histories, and philosophies make an industry unstable. There is greater possibility for mavericks and for misjudging rival's moves. Rivalry is volatile and can be intense. The hospital industry, for example, is populated by hospitals that historically are community or charitable institutions, by hospitals that are associated with religious organizations or universities, and by hospitals that are for-profit enterprises. This mix of philosophies about mission has lead occasionally to fierce local struggles by hospitals over who will get expensive diagnostic and therapeutic services. At other times, local hospitals are highly cooperative with one another on issues such as community disaster planning.
10. Industry Shakeout. A growing market and the potential for high profits induces new firms to enter a market and incumbent firms to increase production. A point is reached where the industry becomes crowded with competitors, and demand cannot support the new entrants and the resulting increased supply. The industry may become crowded if its growth rate slows and the market becomes saturated, creating a situation of excess capacity with too many goods chasing too few buyers. A shakeout ensues, with intense competition, price wars, and company failures.
The concentration of firms in an industry is of interest to economists, business strategists, and government agencies. Here, we discuss two commonly-used methods of measuring industry concentration: the Concentration Ratio and the Herfindahl-Hirschman Index.
Concentration Ratio (CR)
The concentration ratio is the percentage of market share owned by the largest m firms in an industry, where m is a specified number of firms, often 4, but sometimes a larger or smaller number. The concentration ratio often is expressed as CRm, for example, CR4.
The concentration ratio can be expressed as: CRm = s1 + s2 + s3 + ... ... + sm
where si = market share of the ith firm.
If the CR4 were close to zero, this value would indicate an extremely competitive industry since the four largest firms would not have any significant market share.
In general, if the CR4 measure is less than about 40 (indicating that the four largest firms own less than 40% of the market), then the industry is considered to be very competitive, with a number of other firms competing, but none owning a very large chunk of the market. On the other extreme, if the CR1 measure is more than about 90, that one firm that controls more than 90% of the market is effectively a monopoly. While useful, the concentration ratio presents an incomplete picture of the concentration of firms in an industry because by definition it does not use the market shares of all the firms in the industry. It also does not provide information about the distribution of firm size. For example, if there were a significant change in the market shares among the firms included in the ratio, the value of the concentration ratio would not change.
blow molded bottle_ бутылка, формованная с раздувом
blow molded bottle_ бутылка, формованная с раздувом
Origin 1) происхождение 2) источник e.g., - country of goods' origin
desalination [deionization] the process of removing salt, esp from sea water so that it can be used for drinking or irrigation
Origin 1) происхождение 2) источник e.g., - country of goods' origin
Source: (NIS, 2012, pp. 29-30)
key demographic data for urban and rural areas. Urban populations are more educated, have better accessibility to amenities, lower rate of infant and under-5 mortality, and better life expectancy than rural populations. The latter, on the other hand, have higher labor force participation, lower unemployment rate, and higher fertility rate. Remote provinces like Koh Kong, Stung Treng, Preah Vihear , Ratanakiri, Kratie, Modulkiri, Otdar Meanchey, and Kampong Speu were seriously lagging behind with rates of fertility, mortality, female illiteracy, and predictive poverty level higher than the national average (MOP, 2013c, pp. 7-8).
Water is Vital_ The average American uses about 190 liters of water each day. To function properly, the body requires between one and seven litres of water per day to avoid dehydration; the precise amount depends on the level of activity, temperature, humidity, and other factors. The world is facing a water crisis as population expands and pollution increases. The World Health Organization estimates that more than 1 billion people lack access to safe
drinking water, and that about 4000 children die every day from water borne diseases.
key demographic data for urban and rural areas. Urban populations are more educated, have better accessibility to amenities, lower rate of infant and under-5 mortality, and better life expectancy than rural populations. The latter, on the other hand, have higher labor force participation, lower unemployment rate, and higher fertility rate. Remote provinces like Koh Kong, Stung Treng, Preah Vihear , Ratanakiri, Kratie, Modulkiri, Otdar Meanchey, and Kampong Speu were seriously lagging behind with rates of fertility, mortality, female illiteracy, and predictive poverty level higher than the national average (MOP, 2013c, pp. 7-8).
Patronage(marketing termination)_customer loyalty
credibility достоверность; правдивость(e.g., the quality of being believed or trusted)
Patronage(marketing termination)_customer loyalty
credibility достоверность; правдивость(e.g., the quality of being believed or trusted)
Patronage(marketing termination)_customer loyalty
credibility достоверность; правдивость(e.g., the quality of being believed or trusted)
remains doubtful. — остаются неясными(сомнительными).
contamination(pullution)_загрязнение; контаминация
Patronage(marketing termination)_customer loyalty
credibility достоверность; правдивость(e.g., the quality of being believed or trusted)
remains doubtful. — остаются неясными(сомнительными).
contamination(pullution)_загрязнение; контаминация
intense competition _острая конкуренция
Patronage(marketing termination)_customer loyalty
credibility достоверность; правдивость(e.g., the quality of being believed or trusted)
remains doubtful. — остаются неясными(сомнительными).
contamination(pollution)_загрязнение; контаминация
intense competition _острая конкуренция
market penetration_ завоевание рынка (проникновение на рынок)
market penetration_ завоевание рынка (проникновение на рынок)
leeway_ отставание.
make up leeway_ выйти из затруднительного положения; наверстать потерянное, упущенное
to give / provide leeway — предоставлять свободу
shopping cart — тележка для покупок (в супермаркете)
to charge a premium price of a differentiation strategy reflects Value actually delivered to the buyer may be important when:
Nature of differentiation is hard to quantify
Buyers are making first-time purchases
Repurchase is infrequent
Buyers are unsophisticated(настоящий)
Distinctive competencies : These competencies enable innovation(provide access to a wide variety of markets), efficiency(superior benefits to the consumer), quality, and customer responsiveness(difficulty to compete), all of which can be leveraged to create a cost advantage or a differentiation advantage.
Organizational (Internal) Economies of Scale.
The most cost efficient level of production is termed Minimum Efficient Scale (MES).
This is the point at which unit costs for production are at minimum - i.e., the most cost efficient level of production.
If MES for firms in an industry is known, then we can determine the amount of market share necessary for low cost entry or cost parity with rivals. For example, in long distance communications roughly 10% of the market is necessary for MES. If sales for a long distance operator fail to reach 10% of the market, the firm is not competitive.
The existence of such an economy of scale creates a barrier to entry. The greater the difference between industry MES and entry unit costs, the greater the barrier to entry. So industries with high MES deter entry of small, start-up businesses. To operate at less than MES there must be a consideration that permits the firm to sell at a premium price - such as product differentiation or local monopoly.
Low switching costs increases rivalry. When a customer can freely switch from one product to another there is a greater struggle to capture
customers.
preferential_ льготный, преференциальный (напр. о пошлинах)
Decline in unit costs(costs declined by 10% to 30%.) resulting from learning curve _firms acquire cost advantages are improving process efficiencies( through skill in designing products & high level of expertise in manufacturing process engineering… ), gaining unique access to a large source of lower cost materials, making optimal outsourcing and vertical integration decisions .
Two issues that should be considered when deciding whether to vertically integrate is cost and control. The cost aspect depends on the cost of market transactions (рыночные сделки)between firms versus the cost of administering the same activities internally within a single firm. The second issue is the impact of asset control, which can impact barriers to entry and which can assure cooperation of key value adding players.
hot docking_ горячая стыковка (установка модуля в базовый блок при полной мощности электропитания)
From a strategic perspective, barriers can be created or exploited to enhance a firm's competitive advantage. Barriers to entry arise from several sources (1 to 6 pion out ).
Government creates barriers.
Although the principal role of the government in a market is to preserve competition through anti-trust actions, government also restricts competition through the granting of monopolies and through regulation.
E.g., Industries such as utilities are considered natural monopolies because it has been more efficient to have one electric company provide power to a locality than to permit many electric companies to compete in a local market.
The regulatory authority of the government in restricting competition is historically evident in the banking industry. Until the 1970's, the markets that banks could enter were limited by state governments. As a result, most banks were local commercial and retail banking facilities. Banks competed through strategies that emphasized simple marketing devices such as awarding toasters to new customers for opening a checking account. When banks were deregulated, banks were permitted to cross state boundaries and expand their markets. Deregulation of banks intensified rivalry and created uncertainty for banks as they attempted to maintain market share. In the late 1970's, the strategy of banks shifted from simple marketing tactics to mergers and geographic expansion as rivals attempted to expand markets.
Organizational (Internal) Economies of Scale.
The most cost efficient level of production is termed Minimum Efficient Scale (MES).
This is the point at which unit costs for production are at minimum - i.e., the most cost efficient level of production.
If MES for firms in an industry is known, then we can determine the amount of market share necessary for low cost entry or cost parity with rivals. For example, in long distance communications roughly 10% of the market is necessary for MES. If sales for a long distance operator fail to reach 10% of the market, the firm is not competitive.
The existence of such an economy of scale creates a barrier to entry. The greater the difference between industry MES and entry unit costs, the greater the barrier to entry. So industries with high MES deter entry of small, start-up businesses. To operate at less than MES there must be a consideration that permits the firm to sell at a premium price - such as product differentiation or local monopoly.
The concept of vertical integration can be visualized using the value chain . Such a firm may consider backward integrating into intermediate manufacturing or forward integrating into distribution. The degree to which a firm owns its upstream suppliers and its downstream buyers
is referred to as vertical integration( Expansion of activities downstream is referred to as forward integration, and expansion upstream is referred to as backward integration.). Two issues that should be considered when deciding whether to vertically integrate is cost and control. The cost aspect depends on the cost of market transactions between firms versus the cost of administering the same activities internally within a single firm. The second issue is the impact of asset control, which can impact barriers to entry and which can assure cooperation of key value adding players.
Barriers to exit work similarly to barriers to entry. Exit barriers limit the ability of a firm to leave the market and can exacerbate(осложнять) rivalry - unable to leave the industry, a firm must compete.
Regulatory restrictions (e.g. banking license)
brand names (e.g. Xerox, McDonalds – can develop customer loyalty; hard to develop and/or imitate)
patents (illegal to exploit without ownership; e.g. new drugs)
unique know-how (e.g. WalMart’s “hot docking” technique of logistics management)
Improving product differentiation - improving features, implementing innovations in the manufacturing process and in the product itself.
The concentration of firms in an industry is of interest to economists, business strategists, and government agencies. Here, we discuss two commonly-used methods of measuring industry concentration: the Concentration Ratio and the Herfindahl-Hirschman Index.
Concentration Ratio (CR)
The concentration ratio is the percentage of market share owned by the largest m firms in an industry, where m is a specified number of firms, often 4, but sometimes a larger or smaller number. The concentration ratio often is expressed as CRm, for example, CR4.
The concentration ratio can be expressed as: CRm = s1 + s2 + s3 + ... ... + sm
where si = market share of the ith firm.
If the CR4 were close to zero, this value would indicate an extremely competitive industry since the four largest firms would not have any significant market share.
In general, if the CR4 measure is less than about 40 (indicating that the four largest firms own less than 40% of the market), then the industry is considered to be very competitive, with a number of other firms competing, but none owning a very large chunk of the market. On the other extreme, if the CR1 measure is more than about 90, that one firm that controls more than 90% of the market is effectively a monopoly. While useful, the concentration ratio presents an incomplete picture of the concentration of firms in an industry because by definition it does not use the market shares of all the firms in the industry. It also does not provide information about the distribution of firm size. For example, if there were a significant change in the market shares among the firms included in the ratio, the value of the concentration ratio would not change.
Grocery store продуктовый магазин, гастроном (магазин, торгующий продуктами питания (напр., мясом, молоком, крупами, хлебобулочными изделиями, кондитерскими изделиями и др.), иногда также лекарственными средствами и некоторыми предметами домашнего обихода (туалетная бумага, моющие принадлежности, гигиенические принадлежности и т. п.))
grocery store продуктовый магазин (магазин, торгующий продуктами питания (напр., мясом, молоком, крупами, хлебобулочными
timber [] 1. 1) а) лесоматериалы; строевой лес; древесина
Customers: people who buy the goods.
Usually, there are several groups of customers.
For Compaq, there are business, home, & government buyers.
purchase the products or services the organization offers
final consumers - purchase products in their final form
intermediate consumers - buy raw materials or wholesale products before selling them to final consumers
.
distinct [] 1) отдельный; особый, индивидуальный; отличный (от - from)
Snapple "Снэпл" Товарный знак безалкогольных напитков (фруктовые напитки, лимонад, чай со льдом [iced tea ], диетические напитки и др.) производства компании [Snapple Beverage Corp.], отделения фирмы "Кэдберри - Шваппс" [Cadbury Schweppes PLC], г. Уайт-Плейнс, шт. Нью-Йорк
In Porter's model, substitute products refer to products in other industries. To the economist, a threat of substitutes exists when a product's demand is affected by the price change of a substitute product. A product's price elasticity is affected by substitute products - as more substitutes become available, the demand becomes more elastic since customers have more alternatives. A close substitute product
constrains the ability of firms in an industry to raise prices.
The price of aluminum beverage cans is constrained by the price of glass bottles, steel cans, and plastic containers. These containers are substitutes, yet they are not rivals in the aluminum can industry.
Consider the substitutability of different types of TV transmission: local station transmission to home TV antennas via the airways versus transmission via cable, satellite, and telephone lines. The new technologies available and the changing structure of the entertainment media are contributing to competition among these substitute means of connecting the home to entertainment. Except in remote areas it is unlikely that cable TV could compete with free TV from an aerial without the greater diversity of entertainment that it affords the customer.
Price of production= cost of production(cost per unite production)
Value of production_объём производства в денежном выражении(scope of manufacturing production and revenue )
Factors Affecting the Price Elasticity of Demand_ The price elasticity of demand measures the responsiveness of quantity demanded to a change in price, with all other factors held constant:
Availability of substitutes: the more possible substitutes, the greater the elasticity. Note that the number of substitutes depends on how broadly one defines the product.
Degree of necessity or luxury: luxury products tend to have greater elasticity.
Some products that initially have a low degree of necessity are habit forming and can become "necessities" to some consumers.
Proportion of the purchaser's budget consumed by the item: products that consume a large portion of the purchaser's budget tend to have greater elasticity.
Time period considered: elasticity tends to be greater over the long run because consumers have more time to adjust their behavior.
Permanent or temporary price change: a one-day sale will elicit(extract) a different response than a permanent price decrease.
Price points: decreasing the price from $2.00 to $1.99 may elicit a greater response than decreasing it from $1.99 to $1.98.
Price of production= cost of production(cost per unite production)
Value of production_объём производства в денежном выражении
In Q4 2014 Apple took 93% of smartphone industry profit
Price of production= cost of production(cost per unite production)
Value of production_объём производства в денежном выражении(scope of manufacturing production and revenue )
The intensity of rivalry is influenced by the following industry characteristics:
4. High storage costs or highly perishable products cause a producer to sell goods as soon as possible. If other producers are attempting
to unload at the same time, competition for customers intensifies.
5. Low switching costs increases rivalry. When a customer can freely switch from one product to another there is a greater struggle to capture customers.
6. Low levels of product differentiation is associated with higher levels of rivalry. Brand identification, on the other hand, tends to constrain rivalry.
7. Strategic stakes are high when a firm is losing market position or has potential for great gains. This intensifies rivalry.
8. High exit barriers place a high cost on abandoning the product. The firm must compete. High exit barriers cause a firm to remain in an industry, even when the venture is not profitable. A common exit barrier is asset specificity. When the plant and equipment required for manufacturing a product is highly specialized, these assets cannot easily be sold to other buyers in another industry. Litton Industries' acquisition of Ingalls Shipbuilding facilities illustrates this concept. Litton was successful in the 1960's with its contracts to build Navy ships. But when the Vietnam war ended, defense spending declined and Litton saw a sudden decline in its earnings. As the firm restructured, divesting from the shipbuilding plant was not feasible since such a large and highly specialized investment could not be sold easily, and Litton was forced to stay in a declining shipbuilding market.
9. A diversity of rivals with different cultures, histories, and philosophies make an industry unstable. There is greater possibility for mavericks and for misjudging rival's moves. Rivalry is volatile and can be intense. The hospital industry, for example, is populated by hospitals that historically are community or charitable institutions, by hospitals that are associated with religious organizations or universities, and by hospitals that are for-profit enterprises. This mix of philosophies about mission has lead occasionally to fierce local struggles by hospitals over who will get expensive diagnostic and therapeutic services. At other times, local hospitals are highly cooperative with one another on issues such as community disaster planning.
10. Industry Shakeout. A growing market and the potential for high profits induces new firms to enter a market and incumbent firms to increase production. A point is reached where the industry becomes crowded with competitors, and demand cannot support the new entrants and the resulting increased supply. The industry may become crowded if its growth rate slows and the market becomes saturated, creating a situation of excess capacity with too many goods chasing too few buyers. A shakeout ensues, with intense competition, price wars, and company failures.
Sears, Roebuck and Co. ." Компания широкого профиля; владеет сетью одноименных универмагов [Sears and Roebuck]. Основана как фирма торговли по почте [mail order company] в 1886; в течение 100 лет (1893-1993) вела обширную торговлю по каталогам [Sears catalog ]. Контролирует страховую компанию "Олстейт иншуранс" [Allstate Insurance Co.] и сеть прокатных пунктов автомобилей "Сирс рент-э-кар" [Sears Rent-A-Car ], оказывает финансовые услуги через компанию "Дин Уиттер" [Dean Witter] и занимается торговлей недвижимостью [real estate] через компанию "Колдуэлл бэнкер" [Coldwell Banker]. Входит в список "Форчун-500" [Fortune 500 ]. Правление в г. Чикаго, шт. Иллинойс, в небоскребе [skyscraper] Сирс тауэр [Sears Tower ].
In pursuing an advantage over its rivals, a firm can choose from several competitive moves:
Changing prices - raising or lowering prices to gain a temporary advantage.
Improving product differentiation - improving features, implementing innovations in the manufacturing process and in the product itself.
Creatively using channels of distribution - using vertical integration or using a distribution channel that is novel to the industry. For example, with high-end jewelry stores reluctant to carry its watches, Timex moved into drugstores and other non-traditional outlets and cornered the low to mid-price watch market.
Exploiting relationships with suppliers - for example, from the 1950's to the 1970's Sears, Roebuck and Co. dominated the retail household appliance market. Sears set high quality standards and required suppliers to meet its demands for product specifications and price.
Jockeying_ переход требований из одной очереди в другую
Decline in unit costs(costs declined by 10% to 30%.) resulting from learning curve _firms acquire cost advantages are improving process efficiencies( through skill in designing products & high level of expertise in manufacturing process engineering… ), gaining unique access to a large source of lower cost materials, making optimal outsourcing and vertical integration decisions .
Two issues that should be considered when deciding whether to vertically integrate is cost and control. The cost aspect depends on the cost of market transactions (рыночные сделки)between firms versus the cost of administering the same activities internally within a single firm. The second issue is the impact of asset control, which can impact barriers to entry and which can assure cooperation of key value adding players.
In pursuing an advantage over its rivals, a firm can choose from several competitive moves:
Changing prices - raising or lowering prices to gain a temporary advantage(Industry's life cycle _Introduction & Growth period ).
Improving product differentiation - improving features, implementing innovations in the manufacturing process and in the product itself.
Creatively using channels of distribution - using vertical integration or using a distribution channel that is novel to the industry. For example, with high-end jewelry stores reluctant to carry its watches, Timex moved into drugstores and other non-traditional outlets and cornered the low to mid-price watch market.
Exploiting relationships with suppliers - for example, from the 1950's to the 1970's Sears, Roebuck and Co. dominated the retail household appliance market. Sears set high quality standards and required suppliers to meet its demands for product specifications and price.
The intensity of rivalry is influenced by the following industry characteristics:
1. A larger number of firms increases rivalry because more firms must compete for the same customers and resources. The rivalry intensifies if the firms have similar market share, leading to a struggle for market leadership.
2. Slow market growth causes firms to fight for market share. In a growing market, firms are able to improve revenues simply because of the expanding market.
3. High fixed costs result in an economy of scale effect that increases rivalry. When total costs are mostly fixed costs, the firm must produce near capacity to attain the lowest unit costs. Since the firm must sell this large quantity of product, high levels of production lead to a fight for market share and results in increased rivalry.
4. High storage costs or highly perishable products cause a producer to sell goods as soon as possible. If other producers are attempting
to unload at the same time, competition for customers intensifies.
5. Low switching costs increases rivalry. When a customer can freely switch from one product to another there is a greater struggle to capture customers.
6. Low levels of product differentiation is associated with higher levels of rivalry. Brand identification, on the other hand, tends to constrain rivalry.
7. Strategic stakes are high when a firm is losing market position or has potential for great gains. This intensifies rivalry.
8. High exit barriers place a high cost on abandoning the product. The firm must compete. High exit barriers cause a firm to remain in an industry, even when the venture is not profitable. A common exit barrier is asset specificity. When the plant and equipment required for manufacturing a product is highly specialized, these assets cannot easily be sold to other buyers in another industry. Litton Industries' acquisition of Ingalls Shipbuilding facilities illustrates this concept. Litton was successful in the 1960's with its contracts to build Navy ships. But when the Vietnam war ended, defense spending declined and Litton saw a sudden decline in its earnings. As the firm restructured, divesting from the shipbuilding plant was not feasible since such a large and highly specialized investment could not be sold easily, and Litton was forced to stay in a declining shipbuilding market.
9. A diversity of rivals with different cultures, histories, and philosophies make an industry unstable. There is greater possibility for mavericks and for misjudging rival's moves. Rivalry is volatile and can be intense. The hospital industry, for example, is populated by hospitals that historically are community or charitable institutions, by hospitals that are associated with religious organizations or universities, and by hospitals that are for-profit enterprises. This mix of philosophies about mission has lead occasionally to fierce local struggles by hospitals over who will get expensive diagnostic and therapeutic services. At other times, local hospitals are highly cooperative with one another on issues such as community disaster planning.
10. Industry Shakeout. A growing market and the potential for high profits induces new firms to enter a market and incumbent firms to increase production. A point is reached where the industry becomes crowded with competitors, and demand cannot support the new entrants and the resulting increased supply. The industry may become crowded if its growth rate slows and the market becomes saturated, creating a situation of excess capacity with too many goods chasing too few buyers. A shakeout ensues, with intense competition, price wars, and company failures.
The concentration of firms in an industry is of interest to economists, business strategists, and government agencies. Here, we discuss two commonly-used methods of measuring industry concentration: the Concentration Ratio and the Herfindahl-Hirschman Index.
Concentration Ratio (CR)
The concentration ratio is the percentage of market share owned by the largest m firms in an industry, where m is a specified number of firms, often 4, but sometimes a larger or smaller number. The concentration ratio often is expressed as CRm, for example, CR4.
The concentration ratio can be expressed as: CRm = s1 + s2 + s3 + ... ... + sm
where si = market share of the ith firm.
If the CR4 were close to zero, this value would indicate an extremely competitive industry since the four largest firms would not have any significant market share.
In general, if the CR4 measure is less than about 40 (indicating that the four largest firms own less than 40% of the market), then the industry is considered to be very competitive, with a number of other firms competing, but none owning a very large chunk of the market. On the other extreme, if the CR1 measure is more than about 90, that one firm that controls more than 90% of the market is effectively a monopoly. While useful, the concentration ratio presents an incomplete picture of the concentration of firms in an industry because by definition it does not use the market shares of all the firms in the industry. It also does not provide information about the distribution of firm size. For example, if there were a significant change in the market shares among the firms included in the ratio, the value of the concentration ratio would not change.
Mobility_способность к быстрому передвижению, перемещению
Nordstrom (универмаг) "Нордстром" Входит в одноименную сеть универсальных магазинов [department store ], основанную в 1901 шведским иммигрантом Дж. Нордстромом [Nordstrom, John W.], разбогатевшим во время "золотой лихорадки" на Клондайке [Klondike Gold Rush ]. В отличие от других магазинов подобного типа, товар разложен по тематическим отделам, отражающим "различные стили жизни". Известен качественной продукцией и относительно высокими ценами. Правление компании "Нордстром" [Nordstrom, Inc.] находится в г. Сиэтле. 149 магазинов в 27 штатах (2004)