UNIT II.pptx
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- 2. COMPETITIVE ADVANTAGE • EXTERNALENVIRONMENT • PORTER’S FIVE FORCES MODEL • STRATEGIC GROUPS COMPETITIVE CHANGES DURING INDUSTRY EVOLUTION • GLOBALIZATION AND INDUSTRY STRUCTURE • NATIONAL CONTEXT AND COMPETITIVE ADVANTAGE RESOURCES • CAPABILITIES AND COMPETENCIES • CORE COMPETENCIES • LOW COST AND DIFFERENTITATION • GENERIC BUILDING BLOCKS OF COMPETITIVE ADVANTAGE • DISTINCTIVE COMPETENCIES • RESOURCES AND CAPABILITIES DURABILITY OF COMPETITIVE ADVANTAGE • AVOIDING FAILURES AND SUSTAINING COMPETITIVE ADVANTAGE
- 3. THE EXTERNAL ENVIRONMENT REFERS TO FACTORS,FORCES, SITUATIONS, AND EVENTS OUTSIDE THE ORGANIZATION THAT AFFECTS ITS PERFORMANCE
- 4. MEANING – EXTERNALENVIRONMENT • An external environment is composed of all the outside factors or influences that impact the operation of business. • The external environment can be broken down into two types: the micro environment and the macro environment • The external environment of a business involves all external forces affecting the company over which it has no direct control • The business must act or react to keep up its flow of operations.
- 5. 1.1. NATURE OFBUSINESS ENVIRONMENT • ENVIRONMENT IS INSEPARABLE FROM BUSINESS • ENVIRONEMNT IS DYNAMIC • BUSINESS LACKS CONTROL OVER ENVIRONMENT • INTERNALAND EXTERNAL FACTORS • ENVIRONMENT IS COMPLEX • ENVIRONMENT IS MULTIFACETED • OPPORTUNITIES AND OBSTACLES • REGULATES THE SCOPE OF BUSINESS • LONG LASTING IMPACT • UNCERTAINTY
- 6. COMPONENTS OF BUSINESS MICROENVIRONMENT • CUSTOMERS • SUPPLIERS • MARKETING INTERMEDIARIES • COMPETITORS • GENERAL PUBLIC MACRO ENVIRONMENT • POLITICAL ENVIRONMENT • ECONOMIC ENVIRONMENT • SOCIAL ENVIRONMENT • TECHNOLOGICAL ENVIRONMENT • PHYSICAL ENVIRONMENT • LEGAL ENVIRONMENT • INTERNATIONAL BUSINESS ENVIRONMENT
- 7. INTERNAL ENVIRONMENT • VALUESYSTEM • VISION, MISSION, GOALS & OBJECTIVES • MANAGEMENT STRUCTURE AND NATURE • INTERNAL POWER RELATIONSHIPS • COMPANY IMAGE & BRAND EQUITY • MISCELLANEOUS FACTORS • MISCELLANEOUS ASSETS & FACILITIES • RESEARCH & DEVELOPMENT • MARKETING RESOURCES • FINANCIAL FACTORS
- 9. EXTERNALANALYSIS • INTRO • PROCEDUREOF EXTERNALANALYSIS • FACTORS AFFECTING EXTERNALANALYSIS • LEVELS OF EXTERNALANALYSIS • LEVELS OF EXTERNALANALYSIS • SIGNIFICANCE OF EXTERNALANALYSIS • TECHNIQUES OF EXTERNALANALYSIS
- 10. EXTERNALANALYSIS • The processby which businesses objectively assess the changes in their industry and the broader world that could affect their current business operations • Examining the industry environment of a company, including factors such as competitive structure, competitive position, dynamics, and history • External analysis helps businesses adjust to potential changes within their industry that could save their business. • For example, A catering company changes the way they store their food products to comply with new FDA regulations. This helps them maintain their status as a catering service
- 11. PROCEDURE FOR EXTERNALANALYSIS UNDERSTANDNATURE OF ENVIRONMENT ANALYSE THE PAST INFLUENCE OF ENVIRONMENTAL FACTORS IDENTIFY CRITICAL COMPETITIVE FORCES ANALYSE THE STATRETEGIC POSITION ADENTIFY THE OPPORTUNITIES AND THREATS
- 12. FACTORS AFFECTING EXTERNAL ANALYSIS •CUSTOMER ENVIRONMENT • COMPETITIVE ENVIRONMENT • INDUSTRY ENVIRONMENT • MACRO ENVIRONMENT
- 13. LEVELS OF EXTERNALANALYSIS •ENVIRONMENTAL SCANNING • INDUSTRY ANALYSIS • COMPETITIVE ADVANTAGE
- 14. SIGNIFICANCE OF EXTERNAL ANALYSIS •WARNS AGAINST THREATS • RECOGNISES ENVIRONMENTAL RISKS • IDENTIFIES OPPORTUNITIES • PROVIDES MORE TIME FOR ROUTINE ACTIVITIES • IDENTIFIES NEW GROWTH AVENUES • CONTINUOUS LEARNING • BUILDS THE IMAGE OF ORGANIZATION • ANALYSES THE COMPETITORS
- 15. EXTERNALANALYSIS – METHODS &TECHNIQUES • SWOT ANALYSIS • PORTER’S FIVE FORCES MODEL • ENVIRONMENTAL THREAT & OPPORTUNITY • PROFILE ANALYSIS(ETOP) • PESTLE ANALYSIS • MARKET SURVEY • FORECASTING • QUEST ANALYSIS • PEST ANALYSIS
- 16. •MAIN OBJECTIVE • DEFINEAREA • FOCUS ON THE COMPETITORS • IDENTIFY KEY FACTORS FOR SUCCESS
- 17. AN OVERVIEW OFTOOLS USED TO ANALYSE THE BUSINESS ENVIRONMENT • QUEST ANALYSIS • ETOPANALYSIS
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- 21. INDUSTRY ANALYSIS • INTRO •COMPETITIVE CHANGES DURING INDUSTRIAL REVOLUTION • PHASES IN INDUSTRIAL REVOLUTION • GROWTH INDUSTRY • SHAKEOUT • MATURE INDUSTRY • DECLINE
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- 23. COMPONENTS OF PORTER’S FIVEFORCES MODEL 1) RIVALRY INSIDE THE INDUSTRY • NUMBER OF PLAYERS • SLOW MARKET GROWTH • HIGH FIXED COSTS • HIGH STORAGE OR HIGHLY PERISHABLE PRODUCTS • LOW SWITCHING COST • LOW LEVELS OF PRODUCT DIFFERENTIATION • MARKET SHARE • HIGH EXIT BARRIERS • DIVERSE COMPETITORS • MARKET SATURATION • 2) THREAT OF SUBSTITUTES • LOW SWITCHING COSTS • LOW SUBSTITUTE PRICE • HIGH QUALITY OF SUBSTITUTE • BETTER PERFORMANCE OF SUBSTITUTE PRODUCTS • AVAILABILITY OF SUBSTITUTES • 3)BUYING BEHAVIOUR • 4)SUPPLIER POWER • 5)THREAT TO NEW ENTRANTS • GOVERNMENT LAWS AND REGUALTIONS • DYNAMICALANALYSIS • ANALYSIS OF OPTIONS
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- 26. STRATEGIC GROUP • Companies,within the same industry, that employ similar strategies with similar resources or have comparable business models, belong to one strategic group. Strategic groups • Have similar characteristics • Have similar market shares • Respond to market trends or competition (threats and opportunities) in similar ways • Offer similar customer service
- 27. STRATEGIC CANVA • Astrategy canvas is basically a line graph that plots functions/factors against importance for a company or an organisation and then overlays competitors or industry benchmarks. • Information can be built to help formulate a competitive strategy
- 28. ETOP - ENVIRONMENTALTHREAT PROFILE OPPORTUNITIES
- 29. QUEST – QUICKENVIRONMENTAL SCANNING TECHNIQUE • This technique is designed to analyze the environment quickly and inexpensively so that businesses can focus on critical issues that have to be addressed in a short span • Pioneered by BURT NANUS & SELWYN ENZER
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- 35. ANALYSING INDUSTRY • INTRO •COMPETITIVE CHANGES DURING INDUSTRY EVOLUTION • DOMINANT ECONOMIC FACTORS • INDUSTRY LIFE CYCLE STAGES • FACTORS ANALYSED IN INDUSTRY ANALYSIS • PORTER’S FIVE FORCES MODEL • COMPONENTS • UTITLITY • LIMITATIONS
- 36. DOMINANT ECONOMIC FACTORS •MARKET SIZE & GROWTH RATE • NUMBER OF RIVALS • SCOPE OF COMPETITVERIVALRY • BUYER REQUIREMENTS AND NEEDS • DEGREE OF PRODUCT DIFFERENTITATION • PRODUCT INNOVATION • RATE OF TECHNOLOGICAL CHANGE • VERTICAL INTEGRATION • ECONOMIES FOR SALE
- 37. FACTORS ANALYSED IN INDUTRIALANALYSIS •BASIC FEATURES AND CONDITIONS OF THE INDUSTRY • INDUSTRY ENVIRONMENT • INDUSTRY STRUCTURE • INDUSTRY ATTRACTIVENESS • INDUSTRY PERFORMANCE • INDUSTRY PRACTISES • EMERGING TRENDS
- 38. LIMITATIONS • EXISTENCE OFSEPARATE AND IDENTIFIABLE • OVERLOOKS THE ABILITY OF LARGE FIRMS • DISAGREEMENT BETWEEN THEORIES • INFLEXIBLE INDUSTRY STRUCTURE • WRONGFUL MARKET ASSUMPTIONS • STATIC MARKET STRUCTURE • FOCUSES ON COMPETITION