School of Economics and Management | Ola Mattisson | FEKH11 Business Policy|

Business Policy
Lecture 3

OLA MATTISSON
School of Economics and Management | Ola Mattisson | FEKH11 Business Policy|
Business Policy lecture 3
Industry analysis
Agenda
2 Swedish minutes
Industry analysis
Competitive situation and industry attractiveness
5 forces a framework for industry analysis
Competitor analysis
School of Economics and Management | Ola Mattisson | FEKH11 Business Policy|
Industry analysis and competitive
strategy
Corporate strategy
What industries do the company participate in? How
to allocate resources?

Business strategy
How to create competitive advantage?
School of Economics and Management | Ola Mattisson | FEKH11 Business Policy|
Industry analysis and competitive
strategy
Strategy choice must reflect:
Industry structure (competetive conditions)
Relative strategic position (Relative position in industry)

ROI is determined of:
Value of the product for the customer
Intensity of competition
Bargaining power of producers relative to suppliers


School of Economics and Management | Ola Mattisson | FEKH11 Business Policy|
Identify relevant features of the
industry
Market size
Market growth rate
Capacity surpluses or shortages
Industry profitability
Entry/exit barriers
Product properties
Rapid technological change
Capital requirements
Vertical integration
Economies of scale
Product innovation pace
School of Economics and Management | Ola Mattisson | FEKH11 Business Policy|
Overall competition analysis
Porters 5 forces model
Rivalry among competing sellers
Threat of potential entry
Competition from substitutes
Power of suppliers
Power of customers

(Grant, page 65 pp)
School of Economics and Management | Ola Mattisson | FEKH11 Business Policy|
Overall competition analysis
Porters 5 forces model
School of Economics and Management | Ola Mattisson | FEKH11 Business Policy|
Overall competition analysis
Porters 5 forces model
School of Economics and Management | Ola Mattisson | FEKH11 Business Policy|
Overall competition analysis
Porters 5 forces model
Pre-requisites for
success
What do
customers want?
Analysis of competition
What drives competition?
What aret the main dimensions
of competition?
How intense are competition?
How can we obstain a superior
competitive position?
How does the frm
survive competition?
Analysis of demand
Who are our customers?
What do they want?




Key Success
Factors
School of Economics and Management | Ola Mattisson | FEKH11 Business Policy|
Industry analysis and competitive
strategy
Segmentation
To divide an industry into subsections with different
characteristics
Customer segments (ex. geograpy, customer type,
distribution)
Product segments (ex. design, size, price)
Strategic groups
the group of firms in an industry following the same or
similar strategy along the strategic dimensions
Strategic dimensions decisive dimensions for strategic
decisions (ex. vertical integration, new markets, product
range)
School of Economics and Management | Ola Mattisson | FEKH11 Business Policy|
Competitor analysis
Why?

Forsee competitors decisions and strategies

Forsee competitors reactions on our initiatives

To evaluate how to direct competitor actions in a direction
that benefits us
School of Economics and Management | Ola Mattisson | FEKH11 Business Policy|
Competitor analysis
How is the firm competing? Today and in
the future?
Investments, R&D and new products, recruitments
Identify competitors current and future
goals

Identify competitors assumptions about
the industry
Industry recipes
Identify competitors resources and
capabilities
Cash, technology, factor costs
School of Economics and Management | Ola Mattisson | FEKH11 Business Policy|

Overall industry attractiveness
Overall summarizing picture

Conclusions about industry attractiveness and potentials


School of Economics and Management | Ola Mattisson | FEKH11 Business Policy|