This document discusses strategy and competitive analysis concepts. It begins by defining strategy as considering the value of a firm across eight components: industry attractiveness, positional value, idiosyncratic value, corporate scope, organizational quality, marketing effectiveness, operations, and financial structure.
It then discusses using Return on Invested Capital (ROIC) as a measure of profitability. Firms that earn a higher ROIC than their cost of capital are profitable. The document provides ROIC data for various industries and firms. Sustained high ROIC requires pleasing customers or producing efficiently.
The rest of the document analyzes industries and competitors using concepts like the five forces framework and looks at specific examples like the beer, snack food
MSP Best Practice: Using Service Blueprints and Strategic IT Roadmaps to Get ...Kaseya
MSP service delivery expert John Kilian of AntFarm will show you how to use service blueprints and implement strategic IT planning that fully aligns with your managed service offering to help you win more MSP business. New MSP service delivery best practice tips you'll learn how to: Help your clients see through the fog to the road ahead – a smoothly paved road where IT is aligned to meet the needs of their business Collaborate on your client's business goals and objectives and develop the IT strategies to support them Create the roadmap that will serve as the foundation for your client's IT planning and budgeting Deliver seamless integration and program management for the Strategic IT Plan that maps directly into your managed services offering(s) Become the ongoing program manager – a trusted advisor – for implementing new solutions that support the strategic IT plan Protect your managed services revenue from poachers and wannabes
IT Service Catalog: Build a Service Taxonomy in 4 Easy StepsEvergreen Systems
IT Service Catalog - Service Taxonomy
What services do we offer? How do we organize them? How can we make them "customer-centric?" What is a good starting point?
Successful IT Service Catalogs have well-organized services. The services taxonomy, or framework is the key to organizing and managing your services effectively.
Please join us to learn how to build a good service taxonomy in 4 logical steps, as well as 3 key mistakes to avoid.
We will also briefly demonstrate our beautiful and innovative customer-centric IT Service Catalog (built on ServiceNow).
Use a Service Taxonomy to Organize and Manage Your IT Services ! What services do we offer? How do we organize them? How can we make them "customer centric?” What is a good starting point?
Successful IT Service Catalogs have well organized services. The Services Taxonomy, or framework is the key to organizing and understanding your services well.
Please join us to learn how to build a good service taxonomy in 4 logical steps, as well as 3 key mistakes to avoid.
In addition to a demo of our prebuilt service taxonomy, we will demonstrate these concepts in our constantly evolving view of a very advanced Employee Self-Service Catalog & Portal, built on ServiceNow technologies.
Recording with demo available at http://content.evergreensys.com/service-taxonomy-webinar-slides-manage-it-services
Difference between a Policy, Process and ProcedureGeorge Gakuru
A brief description of the following and how they relate: Policy, Process, Procedure, Activity, Work Instruction. Include definitions for: Guideline, Framework and Methodology
MSP Best Practice: Using Service Blueprints and Strategic IT Roadmaps to Get ...Kaseya
MSP service delivery expert John Kilian of AntFarm will show you how to use service blueprints and implement strategic IT planning that fully aligns with your managed service offering to help you win more MSP business. New MSP service delivery best practice tips you'll learn how to: Help your clients see through the fog to the road ahead – a smoothly paved road where IT is aligned to meet the needs of their business Collaborate on your client's business goals and objectives and develop the IT strategies to support them Create the roadmap that will serve as the foundation for your client's IT planning and budgeting Deliver seamless integration and program management for the Strategic IT Plan that maps directly into your managed services offering(s) Become the ongoing program manager – a trusted advisor – for implementing new solutions that support the strategic IT plan Protect your managed services revenue from poachers and wannabes
IT Service Catalog: Build a Service Taxonomy in 4 Easy StepsEvergreen Systems
IT Service Catalog - Service Taxonomy
What services do we offer? How do we organize them? How can we make them "customer-centric?" What is a good starting point?
Successful IT Service Catalogs have well-organized services. The services taxonomy, or framework is the key to organizing and managing your services effectively.
Please join us to learn how to build a good service taxonomy in 4 logical steps, as well as 3 key mistakes to avoid.
We will also briefly demonstrate our beautiful and innovative customer-centric IT Service Catalog (built on ServiceNow).
Use a Service Taxonomy to Organize and Manage Your IT Services ! What services do we offer? How do we organize them? How can we make them "customer centric?” What is a good starting point?
Successful IT Service Catalogs have well organized services. The Services Taxonomy, or framework is the key to organizing and understanding your services well.
Please join us to learn how to build a good service taxonomy in 4 logical steps, as well as 3 key mistakes to avoid.
In addition to a demo of our prebuilt service taxonomy, we will demonstrate these concepts in our constantly evolving view of a very advanced Employee Self-Service Catalog & Portal, built on ServiceNow technologies.
Recording with demo available at http://content.evergreensys.com/service-taxonomy-webinar-slides-manage-it-services
Difference between a Policy, Process and ProcedureGeorge Gakuru
A brief description of the following and how they relate: Policy, Process, Procedure, Activity, Work Instruction. Include definitions for: Guideline, Framework and Methodology
IT Service Management Tutorial | What Is ITSM? | ITIL Foundation Training | S...Simplilearn
This presentation on 'IT Service Management' will take you through everything you need to know about the concept of IT service management. ITSM is the practice of delivering IT services and supporting internal customers with the help of people, processes and technology. The video will also cover concepts like what is ITIL, what is ITSM, key concepts of ITSM and the ITIL service lifecycle.
What are the course objectives?
ITIL® 4 is the latest release of the ITIL framework, designed to provide a more practical viewpoint to the ITIL lifecycle with best practices from other complementary platforms such as Agile, DevOps and Lean. The objective of this course is to provide a foundational level of understanding of the ITIL 4 framework, key elements, concepts and terminologies associated with ITIL service lifecycle, and how it has evolved to adopt modern technologies and operational processes. The course covers all necessary concepts in the service management framework to support candidates studying for the ITIL 4 Foundation Certification Exam.
What skills will you learn?
Upon completion of this ITIL Certification training you will learn:
- Concepts, key principles and process models required to pass the ITIL 4 Foundation exam.
- How ITIL principles can help an individual understand and apply IT service management in their organization.
- How to improve customer experience and ITSM efficiency with the help of ITIL tools and techniques.
- The purposes and key terms of 15 ITIL practices.
- Industry best practices for deploying IT services.
Below are the topics explained in this ITIL presentation:
1. What is ITIL?
2. Why ITIL?
3. ITIL Service Lifecyclehttps://www.simplilearn.com/it-service-management/itil-foundation-training
Personally designed (content + graphics design), officially accredited SDI (Service Desk Institute) SDM (Service Desk Manager) courseware.
Trademarks are properties of the holders, who are not affiliated with courseware author.
ServiceNow is the enterprise IT cloud company. We transform IT by automating and managing IT service relationships across the global enterprise. Organizations deploy our service to create a single system of record for IT and automate manual tasks, standardize processes, and consolidate legacy systems. Using our extensible platform, our customers create custom applications and evolve the IT service model to service domains inside and outside the enterprise.
Open Digital Architecture (ODA) is a blueprint for modular, cloud-based, open digital platforms that can be orchestrated using AI.
Designed to support our industry into the cloud native era, ODA sets the framework required
for CSPs to invest in IT, transforming business agility and operations by creating simpler IT and network solutions that are easier and cheaper to deploy, integrate and upgrade. Enabling growth, profitability and a cutting-edge customer experience.
In our webinar following the publication of the AXELOS white paper "An example ITIL-based model for effective Service Integration and Management (SIAM)", the author, SIAM consultant Kevin Holland, described examples of proven concepts and techniques to effectively manage a complex multi-supplier environment.
Kevin also discussed what SIAM is in detail, and how it could be applied in your own organization, as well as providing advice on what works and the pitfalls to avoid.
You can watch the full webinar recording at: www.axelos.com/events-calendar/itil-and-siam-an-example-itil-based-model
Guiding principle is a recommendation that guides an organization in any circumstances
Itil is a registered trademark by Itil 4 is a registered trademark by
The Seven Guiding Principles are:
o Focus on value
o Start where you are
o Progress iteratively with feedback
o Collaborate and promote visibility
o Think and work holistically
o Keep it simple and practical
o Optimize and automate
Simplest form of automation:
Standardize and streamline manual tasks to enable more automatic decision making
See: https://diontraining.com/wp-content/uploads/2019/03/Study-Guide-ITIL-4-Foundation.pdf
ITIL 4 service value chain data flows (input and outputs)Rob Akershoek
High level overview of the Service value chain activities and information flows (input/outputs) based upon ITIL 4 from AXELOS (ITIL 4 Foundation).
Mapping of the ITIL value chain activities to the IT4IT value streams as defined by The Open Group IT4IT Standard.
Itil 4 "management practices as sets of organizational resources designed for performing work or accomplishing an objective"
The mindmap includes links to posts where the practice is explained in more detail.
ITIL® is a registered trademark of AXELOS Limited.
https://www.axelos.com/
General management practices
Strategy management
Portfolio management
Architecture management
Service financial management
Workforce and talent management
Continual improvement
Measurement and reporting
Risk management
Information security management
Knowledge management
Organizational change management
Project management
Relationship management
Supplier management
Service management practices
Business analysis
Service catalogue management
Service design
Service level management
Availability management
Capacity and performance management
Service continuity management
Monitoring and event management
Service desk
Incident management
Service request management
Problem management
Release management
Change enablement
Service validation and testing
Service configuration management
IT asset management
Technical management practices
Deployment management
Infrastructure and platform management
Software development and management
Philip Hearsum - Introducing ITIL 4 - AID2019ALVAO
Philip Hearsum je přesvědčeným zastáncem ITSM obecně a ITILu obzvlášť. Už v době, kdy působil na rozličných pozicích v komerční a státní správě, se aktivně podílel na přípravě ITILu 2011. Od roku 2013 pracuje pro AXELOS, kde má na starosti celý ITIL.
Patří tak k hlavním architektům připravované verze ITIL 4.
Innomaint FM 4.0 | Maintenance Management Software | CMMS SoftwareSrinivasan AT
Here you can find out how Innomaint - the complete maintenance management software that helps to monitor, measure, & manage all the maintenance activities.
Asset Management
Workforce Management
Work Order Management
The ITIL v4 Foundation course aims to introduce participants to the management of modern ITenabled services, to provide them with an understanding of the common language and key concepts and to show them how they can improve their work and the work of their organization with ITIL 4 guidance.
Telecommunication Business Process - eTOM FlowsRobert Bratulic
For related eTOM Flows blog: https://modelitics.wordpress.com/2015/07/06/etom-process-flows-not-just-hierarchies
For related eTOM Flows lecture: https://www.youtube.com/watch?v=r62ZjpnjJI0
Professional Pricing Society (PPS) - First Steps to Pricing ManagementJames (JD) Dillon
Given at the Spring 2016 PPS Conference, this presentation describes how to gain credibility and impact an organization when initially given the charge of owning a pricing function.
IT Service Management Tutorial | What Is ITSM? | ITIL Foundation Training | S...Simplilearn
This presentation on 'IT Service Management' will take you through everything you need to know about the concept of IT service management. ITSM is the practice of delivering IT services and supporting internal customers with the help of people, processes and technology. The video will also cover concepts like what is ITIL, what is ITSM, key concepts of ITSM and the ITIL service lifecycle.
What are the course objectives?
ITIL® 4 is the latest release of the ITIL framework, designed to provide a more practical viewpoint to the ITIL lifecycle with best practices from other complementary platforms such as Agile, DevOps and Lean. The objective of this course is to provide a foundational level of understanding of the ITIL 4 framework, key elements, concepts and terminologies associated with ITIL service lifecycle, and how it has evolved to adopt modern technologies and operational processes. The course covers all necessary concepts in the service management framework to support candidates studying for the ITIL 4 Foundation Certification Exam.
What skills will you learn?
Upon completion of this ITIL Certification training you will learn:
- Concepts, key principles and process models required to pass the ITIL 4 Foundation exam.
- How ITIL principles can help an individual understand and apply IT service management in their organization.
- How to improve customer experience and ITSM efficiency with the help of ITIL tools and techniques.
- The purposes and key terms of 15 ITIL practices.
- Industry best practices for deploying IT services.
Below are the topics explained in this ITIL presentation:
1. What is ITIL?
2. Why ITIL?
3. ITIL Service Lifecyclehttps://www.simplilearn.com/it-service-management/itil-foundation-training
Personally designed (content + graphics design), officially accredited SDI (Service Desk Institute) SDM (Service Desk Manager) courseware.
Trademarks are properties of the holders, who are not affiliated with courseware author.
ServiceNow is the enterprise IT cloud company. We transform IT by automating and managing IT service relationships across the global enterprise. Organizations deploy our service to create a single system of record for IT and automate manual tasks, standardize processes, and consolidate legacy systems. Using our extensible platform, our customers create custom applications and evolve the IT service model to service domains inside and outside the enterprise.
Open Digital Architecture (ODA) is a blueprint for modular, cloud-based, open digital platforms that can be orchestrated using AI.
Designed to support our industry into the cloud native era, ODA sets the framework required
for CSPs to invest in IT, transforming business agility and operations by creating simpler IT and network solutions that are easier and cheaper to deploy, integrate and upgrade. Enabling growth, profitability and a cutting-edge customer experience.
In our webinar following the publication of the AXELOS white paper "An example ITIL-based model for effective Service Integration and Management (SIAM)", the author, SIAM consultant Kevin Holland, described examples of proven concepts and techniques to effectively manage a complex multi-supplier environment.
Kevin also discussed what SIAM is in detail, and how it could be applied in your own organization, as well as providing advice on what works and the pitfalls to avoid.
You can watch the full webinar recording at: www.axelos.com/events-calendar/itil-and-siam-an-example-itil-based-model
Guiding principle is a recommendation that guides an organization in any circumstances
Itil is a registered trademark by Itil 4 is a registered trademark by
The Seven Guiding Principles are:
o Focus on value
o Start where you are
o Progress iteratively with feedback
o Collaborate and promote visibility
o Think and work holistically
o Keep it simple and practical
o Optimize and automate
Simplest form of automation:
Standardize and streamline manual tasks to enable more automatic decision making
See: https://diontraining.com/wp-content/uploads/2019/03/Study-Guide-ITIL-4-Foundation.pdf
ITIL 4 service value chain data flows (input and outputs)Rob Akershoek
High level overview of the Service value chain activities and information flows (input/outputs) based upon ITIL 4 from AXELOS (ITIL 4 Foundation).
Mapping of the ITIL value chain activities to the IT4IT value streams as defined by The Open Group IT4IT Standard.
Itil 4 "management practices as sets of organizational resources designed for performing work or accomplishing an objective"
The mindmap includes links to posts where the practice is explained in more detail.
ITIL® is a registered trademark of AXELOS Limited.
https://www.axelos.com/
General management practices
Strategy management
Portfolio management
Architecture management
Service financial management
Workforce and talent management
Continual improvement
Measurement and reporting
Risk management
Information security management
Knowledge management
Organizational change management
Project management
Relationship management
Supplier management
Service management practices
Business analysis
Service catalogue management
Service design
Service level management
Availability management
Capacity and performance management
Service continuity management
Monitoring and event management
Service desk
Incident management
Service request management
Problem management
Release management
Change enablement
Service validation and testing
Service configuration management
IT asset management
Technical management practices
Deployment management
Infrastructure and platform management
Software development and management
Philip Hearsum - Introducing ITIL 4 - AID2019ALVAO
Philip Hearsum je přesvědčeným zastáncem ITSM obecně a ITILu obzvlášť. Už v době, kdy působil na rozličných pozicích v komerční a státní správě, se aktivně podílel na přípravě ITILu 2011. Od roku 2013 pracuje pro AXELOS, kde má na starosti celý ITIL.
Patří tak k hlavním architektům připravované verze ITIL 4.
Innomaint FM 4.0 | Maintenance Management Software | CMMS SoftwareSrinivasan AT
Here you can find out how Innomaint - the complete maintenance management software that helps to monitor, measure, & manage all the maintenance activities.
Asset Management
Workforce Management
Work Order Management
The ITIL v4 Foundation course aims to introduce participants to the management of modern ITenabled services, to provide them with an understanding of the common language and key concepts and to show them how they can improve their work and the work of their organization with ITIL 4 guidance.
Telecommunication Business Process - eTOM FlowsRobert Bratulic
For related eTOM Flows blog: https://modelitics.wordpress.com/2015/07/06/etom-process-flows-not-just-hierarchies
For related eTOM Flows lecture: https://www.youtube.com/watch?v=r62ZjpnjJI0
Professional Pricing Society (PPS) - First Steps to Pricing ManagementJames (JD) Dillon
Given at the Spring 2016 PPS Conference, this presentation describes how to gain credibility and impact an organization when initially given the charge of owning a pricing function.
PRESENTATION: Why the conventional perception of supplier relationships needs a refresh.
------------------------------------------------
Challenge conventional thinking in your business.
Proxima offers a refreshing approach to understanding and orchestrating the complex network of external assets that fuel your business’ success. Your suppliers. We call this approach Catalytics®.
Find out more here http://www.proximagroup.com
Stepping into a role which requires business finance knowledge? Here is a short guide offering advice, tools, and expertise that you will need to equip yourself with to be successful. Check out our Diploma in Business Finance for more.
How To Create The Perfect Start-Up Pitch Deck The right Way for Entrepreneurs || From a VC perspective
Founders who deeply follow those recommendations will have better chance to build a defining pitch deck for VCs.
If you think you have a good pitch, send it through my way at eharfouche@polytechventures.ch
While most retailers focus on the inventory that is visible in their stores and distribution centres, too few pay attention to the hidden costs of high inventory.
Netwealth educational webinar - Unlocking the value in your financial plann...netwealthInvest
During our February 2017 webinar, Rob Jones from Peloton Partners shared his research and insights into how to successfully grow your financial planning business.
Group Exercise:
Using this learning material, each group to answer the following questions:
1. How can we apply this to ISS?
2. What needs to be done?
3. What needs to be changed?
How to Make a Field invisible in Odoo 17Celine George
It is possible to hide or invisible some fields in odoo. Commonly using “invisible” attribute in the field definition to invisible the fields. This slide will show how to make a field invisible in odoo 17.
Acetabularia Information For Class 9 .docxvaibhavrinwa19
Acetabularia acetabulum is a single-celled green alga that in its vegetative state is morphologically differentiated into a basal rhizoid and an axially elongated stalk, which bears whorls of branching hairs. The single diploid nucleus resides in the rhizoid.
Safalta Digital marketing institute in Noida, provide complete applications that encompass a huge range of virtual advertising and marketing additives, which includes search engine optimization, virtual communication advertising, pay-per-click on marketing, content material advertising, internet analytics, and greater. These university courses are designed for students who possess a comprehensive understanding of virtual marketing strategies and attributes.Safalta Digital Marketing Institute in Noida is a first choice for young individuals or students who are looking to start their careers in the field of digital advertising. The institute gives specialized courses designed and certification.
for beginners, providing thorough training in areas such as SEO, digital communication marketing, and PPC training in Noida. After finishing the program, students receive the certifications recognised by top different universitie, setting a strong foundation for a successful career in digital marketing.
Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
Macroeconomics- Movie Location
This will be used as part of your Personal Professional Portfolio once graded.
Objective:
Prepare a presentation or a paper using research, basic comparative analysis, data organization and application of economic information. You will make an informed assessment of an economic climate outside of the United States to accomplish an entertainment industry objective.
Francesca Gottschalk - How can education support child empowerment.pptxEduSkills OECD
Francesca Gottschalk from the OECD’s Centre for Educational Research and Innovation presents at the Ask an Expert Webinar: How can education support child empowerment?
Embracing GenAI - A Strategic ImperativePeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
Introduction to AI for Nonprofits with Tapp NetworkTechSoup
Dive into the world of AI! Experts Jon Hill and Tareq Monaur will guide you through AI's role in enhancing nonprofit websites and basic marketing strategies, making it easy to understand and apply.
Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
3. A Common and Comprehensive Measure of
Profitability
3
RETURN ON INVESTED CAPITAL (ROIC) =
Net Operating Profit After Tax
Invested Capital
Profitable means the firm’s ROIC is higher than the firm’s
cost of capital.
In the US, the median ROIC is about 12%.
The least profitable firms have negative ROICs.
“Really high” might be an ROIC of 40% or more.
4. Industries Usually Contain Outperformers
Most Data from Capital IQ, drawn from years ranging between 2014-16
Averages of 2014 – 2016 ROIC
Auto = 6% ? > 23%
Auto Parts = 14% AutoZone = 31%
Casual Apparel = 16% The Buckle = 49%
Fast/Fast Casual Restaurants = 11% Dominos = 70%
Restaurants = 7% Cracker Barrel = 17%
Hotels = 13% Marriott = 47%
Online Travel Agents = 14% Priceline = 40%
Aircraft Manufacturing = 11% Boeing = 33%
Fashion & Athletic Apparel = 21% Lululemon = 36%
Footwear Industry = 9% Nike = 19%
Off-Price Retailers = 19% TJX = 29%
Home Improvement Industry = 11% Home Depot = 43%
Industry (US Average ≈ 12%)
Examples of Firm Who Earn
Economic Profits
Sustained profits requires that the firm is outstanding at pleasing its customers or producing efficiently.
5. The Five Forces Identifies Scarcity and Scalability
Along an Industry Vertical Chain…
Rivalry: Firms seek to avoid rivalry by serving a
segment better than other firms do—but
economies of scale can make growth “cheap” in
the short run but expensive in the long run as
“scarcity” and price premiums are eliminated.
Substitutes are products
that “sandwich” in the
industry. Substitutes are
either cheaper but
“worse” or better but
more expensive.
Substitutes are
threatening when they
to reduce the industry’s
scarcity. Entrants threaten to directly reduce the
scarcity of a firm. Generally, big fixed
and sunk costs limit entry…that is, the
more scalable the incumbents are, the
less attractive entry is.
Suppliers add value
to the product, but
the more the
supplier’s input
matters to the end
user, the higher the
risk of supplier power
if there are few
alternatives to the
supplier’s input. In
other words,
sometimes it’s the
supplier who enjoys
more scarcity than
the industry. 5
Buyers value the good more than it costs to
produce, but if you sell buyers a HIGH share
of their costs, they will get informed or
might backward integrate—either move
limits the industry’s bargaining position
because the buyer may find a satisfactory
alternative.
6. Global Beer ROICs
International
3yr Average
(2013-2015)
AB-InBev 12.70
SAB Miller 8.75
Heineken 7.78
Carlsberg 2.32
China Resources Enterprise -1.62
Why is earning ROIC>WACC generally challenging?
7. But even in markets where owning distribution is
allowed, most brewers don’t self-distribute. Why?
Distribution of Alcohol in the US
9. PEPSI AND COKE SPEND AT
LEAST 5X MORE ON
ADVERTISING THAN LAY’S
$355 million in
2016
$192 million in
2016
$35.92 million in 2014
Source: Statista
12% of
Revenue
4% of Revenue11% of
Revenue
10. To Reduce Rivalry:
• Consolidate
• Move capacity to underserved markets--
Dominate a segment
• Differentiate
• Improve production efficiency (most efficient
producer gets more share)
11. To Tame Buyer Power….
• Need a “win-win”
• AB wants the best distribution
partner – AB needs the distributor to
feel the same way about AB that AB
feels about the distributor.
12. What Does this Do for the Distributor’s
Economics, Rivalry and Substitutes?
12
A portfolio of over 400 beer brands including:
Budweiser, Bud Light, Corona, Stella Artois, Beck’s, Castle, Castle Lite, Hoegaarden, Leffe,
Aguila, Antarctica, Brahma, Cass, Chernigivske, Cristal, Harbin, Jupiler, Klinskoye, Michelob
Ultra, Modelo Especial, Quilmes, Victoria, Sedrin, Sibirskaya Korona and Skol.
13. Sam Adams…
Gross Margin: 39%
Operating Margin: 10%
Sam Adams does better than the typical craft brewer.13
Retailer $0.20
Distributor
$0.24
Operating
Profit $0.06
Operating
Expense $0.16 COGS $0.34Craft Brewer
$0.56
14. Doesn’t Get Much Better Than This:
AB-InBev
Gross Margin: 60%
Operating Margin: 30% 14
Retailer
$0.20
Distributor
$0.16
Operating
Profit $0.19
Operating
Expense $0.19
COGS $0.26
Brewer
$0.64
15. To Reduce Threat From Substitutes…
• More effective marketing – 4 P’s as good as
any mnemonic…
– Product
– Place (get the channels on board)
– Promotion (communicate and resonate ala
Subaru)
– Price – more than just level, but innovative
revenue model.
18. I Dealt with Two Storms in the
Fall of 2009
• One knocked power out in much of my town
(Scarsdale).
• The second was my daughter, then a high school
freshman, who decided to use brute force to earn
straight A’s – for all the wrong reasons, but that is
another story.
19. At About 10pm One Evening in
Late October…
• Samantha: “We gotta find a place to get
green or blue glitter…”
• Me: (Apparently confused)
• Samantha: “MOM…SERIOUSLY? LET’S GO!”
• You may know that complying with a
teenager is generally less exhausting than
reasoning with her.
22. Information Students are Given…
• Participation: 15%
• Group work: 20%
• Puppet: 15%
• Midterm: 25%
• Final Exam: 25%
Assume there is a grade curve (so, say, up to
20% of students can receive an A).
What information is missing?
22
23. 0
0.1
0.2
0.3
0.4
0.5
70 80 90 100 110
Score
Low Variance
Mean: 90,…
0
0.005
0.01
0.015
0.02
5 55 105 155
Score
High Variance
Mean: 80,…
0
0.02
0.04
0.06
0.08
0.1
50 60 70 80 90 100 110 120
Score
Medium Variance
Mean: 85,…
How much variance was
there among the grades
given on the puppets?
- Is the puppet an important
component of the final
grade?
- Yes…its necessary, but
- Puppet can’t pull you above
the mean.
- Sock puppet the heck out of
something that is high weight
but low variance.
24. The Teacher is the Customer and
Classmates are Competitors
• Customers (or a customer segment) grade you
on a set of attributes
• We need a lot of information to be strategic
25. Strong Analogy to Business Strategy
• If demand is high relative to supply – firms don’t
compete directly with each other.
– Firms focus on learning what are customer
expectations and
– How these expectations can be produced
efficiently
– Firms who execute better outperform in this
environment.
• If supply exceeds demand, firms must outperform
their competitors
– Firms who outperform must be perceived as “high
tail” by their customers
– And execution still matters
26. What We Need to Know—IN THE MINDS
OF CUSTOMERS
• In which components, historically, did the
instructor discern most carefully—that is, which
components generally exhibited the most
VARIANCE among students?
• In components with low variance—what level of
work constituted “meeting the bar” in the mind
of the instructor?
• In components with high variance—what
attributes or criteria were used to distinguish
scores?
• Which attributes does the customer consider
most carefully—that is, which attributes have
high weight?
• In attributes with low (perceived) variance—
what level of the attribute constitutes
“meeting the bar”?
• In attributes with high (perceived) variance—
what criteria do customers use to distinguish
firm offerings?
28. What Might EVO Have Done Wrong?
–Over-invested in product attributes that
had LOW WEIGHT
–Over-invested in product attributes that
exhibited LOW PERCEIVED VARIANCE
–Underinvested in attribute that exhibited
HIGH WEIGHT
–Underinvested in attribute that exhibited
HIGH PERCEIVED VARIANCE
29. ROICs of Auto Firms Who Comprise
the Majority of US Sales
23.58
17.64
10.80
8.40
7.54 6.68 6.34 5.75 5.62 5.34 5.01 4.92 4.63 4.00 3.27 2.99
-10.32
-15.00
-10.00
-5.00
0.00
5.00
10.00
15.00
20.00
25.00
30.00
AVERAGE ROIC JULY 2014 - AUGUST 2017ROIC (%)
30. ROIC Has 3 Components
• Income = Margin * Volume
• The Denominator is Invested Capital
1 = Firm Earns a High
Premium Over Cost
2 = For a Large Enough
Number of Customers
3 = And the Amount Invested Is
Low Relative To The Income
Earned.
31. Subaru Global Platform vs. the
Competition
31
~22
Platforms
~30
Platforms
One Global Platform
32. Reviews
• From Car and Driver (2017): The Outback may
not inspire many thrills, but that’s not its
mission. What it will do is get you, your
passengers, and your cargo wherever you
want to go, comfortably and quietly, across
whatever the terrain may be.
• “Practical”, ”Sensible”, “Functional”
33. Make a Table of Key Automobile Attributes and a Set of
Potential Competitors for the Subaru Forester…
Competitors
Price
Level
Attribute
(1)
Attribute
(2)
Attribute
(3)
Attribute
(4)
34. Make/Model MSRP
Perceived
safety
5 year cost
Fuel
Mileage
Horse
Power
Subaru Forester $22,820
Subaru XV Crosstrek $22,820
Nissan JUKE $23,030
Mitsubishi Outlander
Sport
$22,920
Jeep Wrangler $23,590
Hyundai Tucson $22,325
Jeep Patriot $22,185
Kia Sportage $22,495
Dodge Journey $22,490
Strongly Recommend
Mediocre
Not Recommended
Firms Who Sustain High ROIC Over Time Can
Be Framed as Outstanding, Unique, or a “Monopoly”
34
Higher variance Lower variance
SOURCE: Kelley Blue Book; Insurance Institute for Highway Safety (IIHS)
37. Is Subaru Really Safe?
• Turns out that this is a very complicated question:
– What kind of crash – point of impact and with what?
– Involving precisely what type of road conditions?
• From Forbes 12/2/09 The Best Cars in a Crash:
– Aim of article was to answer the question – what car best
protects people in front, side, rear and rollover crashes?
– Conclusion: Japanese automaker Subaru earned four out of 10
spots on our list of the best cars in a crash. It also reported sales
last month more than 24% higher than November 2008, and up
almost 14% for the year to date. The company says that 2009
will likely be Subaru's highest-selling year ever.
– Why? The cars' three-ring construction, which reinforces body
pillars from front to rear -- car is “over built” in this respect.
38. In 2014, Subaru was the 9th largest player in the US
Large Enough Segment for Subaru to Serve Profitably
38SOURCE: Edmunds.com; US auto sales by manufacturer, as of June 2014
2.9%
0%
5%
10%
15%
20%
As of June 2014
39. But Unrelenting Internal and External Pressure
on Management of Subaru to GROW
What would you do?
40. 60%
$$ $88,000
68%
40% chose Subaru over other brands
Customers under 35
48%
Begin by Learning: Who Buys Subarus?
College Educated
Gender
Pet Owner
LGBT
Household Income
87% 38% (Industry avg.)
55% (industry avg.)
$78,000
68% 45% (industry avg.)
SOURCE: JD Power; Team Subaru; Bureau of Labor Statistics
Demographic
Category
40
42. June 22nd, 2016
Carmichael Lynch took home eight
American Advertising Awards including
the “People’s Choice: Best of Show” for
Subaru’s “Bucket List.”
44. SUBARU
UNIT SALES 2000-2016
800,000
600,000
400,000
200,000
UNITSALES
“…with the industry about to ring up the lowest
annual sales per capita since World War II,
Subaru was set to break annual sales of 200,000
for only the second time in its history, and the
first time since 2006”
Forbes, December 29th, 2016
45. Branding is Not an Attribute…It’s an Association of a
Product with an Attribute
46. Strategy vs. Marketing
Strategy
• Figure out your target
market’s highly weighted
attributes
• Determine which attributes
are “table stakes”
• And in which attributes your
target perceives variance
• Determine most efficient
means to produce the highly
weighted attributes
• Identify the moats
Branding
• Develop an emotional and
authentic relationship with
your target
• Don’t list the attributes –
promote the product so
the target market believes
you ARE the attributes
47. Still, Not Everyone Wants a Subaru
47
SOURCE: Edmunds.com; US auto sales by manufacturer, as of June 2017
As of Summer 2017
0
2
4
6
8
10
12
14
16
18
Sales(%)
US Auto Sales by Manufacturer
3.7 %
48. Moats Protect a “Monopoly” Replication
• Moats exist when competitors are better
off NOT copying the firm’s unique product
attributes.
• Which means if competitors DO copy the
firm…
• Their profits are LOWER than if they DIDN’T
• Moats are the things that make the firm too
expensive to copy.
• If competitors ARE better off copying the
firm…then the firm has provoked…
• RIVALRY! And this is REALLY BAD.
49. Examples of “Moats” or Impediments to Replication or
Imitation of A Firm’s Market Advantages…
Legal Barriers
One-of-a-Kind
Strategic Assets
Information Gaps
and Complexity
Economies of Scale,
Market Size, and
Sunk Cost
Increasing Returns
Advantages
• Patents
• Copyrights
• Trademarks
• Operating Licenses
• Superior Locations
• Human Talent
• Trade secrets
• Intellectual property
• Brand names
• “Black magic”
• Social complexity
• Path dependence
• Need to imitate on
numerous
dimensions
• Cumulative experience
along a learning curve
• Product performance
track records and
reputation
• Installed base in a
network market
• Market big enough
to support just one
efficient-scale firm
MostpowerfulLeastpowerful
What do you do when they expire?
Worth more to other firms?
Risk of Obsolescence?
Gateways to profitable growth?
Often most enduring ... but will they prevent
us from replicating our success
formula as we grow?
Will advantage be
undermined as market grows?
Will advantage be
undermined by shifts in technology or
customer priorities?
49
The extreme of an increasing return situation is a “winner take all” market. Network effects, high
multi-housing costs and low demand for differentiation are the conditions that generally underlie
winner take all markets.
51. 2012 2013 2014 2015 2016 2017
McD 18.7 18.0 17.2 15.6 17.8 19.1
Burger King 7.6 8.3 3.7 5.3 6.8 6.5
-
5.0
10.0
15.0
20.0
25.0
ROIC We Take this as Evidence that
McDonald’s is Prioritizing Better
Revenues about $1.2
billion
52. 0
0.002
0.004
0.006
0.008
0.01
0.012
0.014
0.016
0.018
0.02
5 25 45 65 85 105 125 145 165
Score
High Variance
Mean: 80, StDev: 30
Being “high tail” means:
• Pay attention to attributes with high weight
• Focus resources on attributes in which consumers perceive
variance rather than on…
• Attributes that you can “sock puppet”…
• AND competitors understand that the cost of copying you is high
relative to the benefit, so…
• You face relatively little competition
53. HERSHEY MARS
ROIC 25% 12% Unknown
(private company)
No. countries
sold
70 191 70
Brands
(chocolate only)
18
(685 SKUs)
8 21
US Market
Share(chocolate only)
44.6% 4.6% 29.2%
Chocolate Competitors
Source: IBISWORLD, Hershey 10K, Nestle 10K
54. Hershey Distribution Channels (US
Market)
Source: Hershey’s Fact Book Source: IBISWORLD
...and how the retail dollar is split
57. Data Driven Marketing
➔ Doubled cash flows to $1.07 billion
➔ Optimize store layout
➔ SWAS concept to increase sales by 25%
➔ VideoMining capturing purchase
decisions
58. “Buy a commodity, sell a Brand.” -
Warren Buffett
$7.5 Billion
$4.2 Billion
Source: Capital IQ
59. Takeaways
• What product/service attributes have weight
and which have weight and variance?
• Goal: Firm’s output is judged as “high tail” by
the firm’s target market
– Income is high relative to Invested capital
– Competitors are WORSE OFF if they IMITATE
• Don’t make choices that provoke competition
60. Strategy Framework
Industry attractiveness?
• Five Forces and market structure:
– Is industry ’s output scarce relative to demand? (low rivalry).
– Is what the supplier sells scarce relative to what the industry sells?
– Can buyers do without what the industry sells?
– Do entrants or substitutes threaten scarcity?
– Nature of demand and MES?
What is the “hand dealt”? Need clear idea of opportunities/constraints inherent in the firm’s
context.
Potential for firm level advantages?
• Advantages fall into one or a combination of 3 buckets:
– Preemption: first mover advantage (being first to give the market what it wants usually
matters!)
– Core competencies: capabilities entrenched in firm’s infrastructure and operating
practices which generate a WTP or C advantage (or both).
– Employed Resources: Un-owned but especially productive inputs (i.e., unique talent (S.
Spielberg)
Firm plan to develop defendable, scalable and scopable assets/capabilities that produce attributes
consumers view as unique (scarce). Plan to drive a wedge between WTP & C.
Sustainability?
• Industry dynamics (Changes in taste, technology, regulations, globalization, capital markets, etc.)
• Execution:
– Organizational design: How management balances “redundancy” and “flexibility”
– Capital budgeting: How the management chooses how to invest and finance its
investments
– People: How management drives engagement and retention.
How much risk of obsolescence does the firm face and is it skilled at managing these
external and internal risks?
Whereisthescarcity
intheindustry’s
ecosystem?
Canthefirm
engineeravaluable
“monopoly”?
Canthefirmcontend
forcesthatmakeits
outputorproduction
processlessoptimal?