External & Internal Analysis

External & Internal Analysis

1. The industry

   • Satisfy same customer needs
   • Sector
     • Closely related industries
   • Market Segment
     • Distinct customers
     • Can be differentiated
   • Change over time
   • Competitive Forces Model
     • Based in Michael E. Porters model
     • Entry by potential competitors
       • Not currently but they can do so
       • Threat to established companies
       • Height of the barriers to entry,
         • Economies of Scale
           • Mass producing
           • Discunts in a bulk
           • Spreading fixed production costs
           • Spreading mkt, distribution cost
           • Low costs
         • Brand loyalty
           • preference for established companies
         • absolute cost advantage
           • Not match the established companies’ lower cost structure
         • Switching costs
           • invests time, energy, and money
         • Government Regulations
         • important determinants of profit rates within an industry.
     • Rivalry among established companies
       • intensity of rivalry
         • Industry Competitive Structure
           • Number and size distribution of companies in it
         • Industry Demand
           • Growing demand tends to reduce rivalry
         • Cost Conditions
           • The desire to grow volume
           • High cost, less profitability
         • Exit Barriers
           • Difficult to exit
           • Need to survive
       • Price
       • Advertising & promotion
       • selling efforts
     • Bargaining power of buyers
       • Ability of buyers to bargain down prices
       • Demanding quality and service.
     • Bargaining power of suppliers,
       • Ability to raise prices and costs
     • Substitutes to an industry’s products,
       • Products of different industries that satisfy similar customer needs.
     • Power of complement providers
       • Add value
       • Use together
       • Combined satisfy better
     • change as an industry evolves
     • Macroenvironment
       • Affect directly to the forces
       • Forces
         • Macroeconomic
           • growth rate of the economy
           • interest rates
             • can determine the demand
           • currency exchange rates
             • define the comparative value
           • inflation
             • destabilize the economy
           • affect the well-being of a nation
         • Global
           • Changes
           • more competitive global marketplace
           • New markets
         • Technological
           • new product possibilities
           • creative and destructive
           • reshape industry structure
         • Demographic
           • characteristics of a population
             • such as age and gender
           • Generations
         • Social
           • social mores and values affect
         • Political and Legal
           • outcomes of changes in laws and regulations,
   • Strategic groups
     • Groups with similar strategy
     • Captured by a small number of factors
       • Ex. product attributes
     • Implications
       • Customers see all the group as subsititutes
       • each group=different relation with competitive forces
     • Opportunities and weakness
       • Move to another group
   • Lyfe-cycle analysis
     • Changes in the industry
     • Analyse the evolution
       • sequential stages
         • 1. Embryonic Industries
           • beginning to develop
           • Slow growth
           • buyers’ unfamiliarity
           • high prices
           • educating customers,
           • distribution channels,
           • design
         • 2. Growth Industries
           • Increasing demand
           • Familiar products
           • scale economies= low prices
           • threat of potential competitors
         • 3. Industry Shakeout
           • rivalry between companies
           • demand is no longer growing
           • Capacity to growth
         • 4. Mature Industries
           • market is saturated
           • Growth is low or 0
           • barriers to entry increase
           • maintain their revenues
         • 5. Declining Industries
           • negative growth
           • rivalry increases
           • excess capacity.
           • severe price competition.
     • Issue
       • generalization
       • Vary for industry
       • Some industries skip a stage

2. The company

   • Compatitive Advantage
     • More profitability
       • Value
         • attributes received
       • Price
         • individual’s unique assessment
       • Costs
     • Sources
       • Resources
         • assets of a company
           • tangible & intandible
       • Capabilities
         • resource-coordinating skills
           • rules, routines, procedures
         • strong demand & less costs
       • Distinctive competencies
         • firm-specific strengths
         • differentiate its products
     • Build and sustain CA
       • to differentiate for others
       • more value
       • lower costs
       • Superior Efficiency
         • measure
           • outputs/inputs
       • Superior Quality
         • perceive higher utility vs. comp.
         • reliable products =less time
       • Innovation
         • create new product&processes
         • creates value
         • most important
       • Customer Responsiveness
         • know their customers’ needs
         • superior design
         • superior service
         • superior after-sales
     • Analyse
       • measurement of profitability
         • ROIC
           • net profit/invested capital.
           • effectiveness to use the capital
     • Durability of CA
       • Barriers to Imitation
         • difficult for a competitor to copy a company’s CA
         • Imitating Resources
         • Imitating Capabilities
       • Capability of Competitors
         • based in strategic commitments of competitors
         • absorptive capacity of competitors to imitate
       • Industry Dynamism
         • changes rapidly
         • very high rate of product innovation
   • Value chain
     • activities that transforms inputs into outputs
     • Primary activities
       • 3.Research and Development
         • design
       • 4.Production
         • creation process
       • 1.Marketing and Sales
         • Create value
       • 2.Customer Service
         • Superior utility
         • support
     • Support activities
       • Materials Management
         • logistics
       • Human Resources
         • right people
         • give value
       • Information Systems
         • managing and tracking
       • Company Infrastructure
         • companywide context

Imágenes y archivos del mapa

• Five Porters Model (application/pdf)
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• LO 1.4) Identifying Competitive Advantages (Enclavar)
• Porter's Five Forces Analysis of Netflix (Enclavar)