Strategic Management

Major Bhargava R D
Executive Director
XHire HR Consulting LLP
Bangalore
 Strategic Management
Module 2
COMPETITIVE ADVANTAGE (12 HOURS)
 External Environment
 PESTEL Analysis,
 SWOT Analysis,
 Porter’s Five Forces Model,
 The Competitive Profile Matrix (CPM),
 Globalization and Industry Structure – Resources,
Capabilities and Competencies
 Value Chain Analysis – Core Competencies, Generic
Building Blocks of Competitive Advantage
 Distinctive Competencies - Avoiding Failures and
Sustaining Competitive Advantage
 Strategic Management
Module 2
Part II
COMPETITIVE ADVANTAGE
 PESTEL Analysis
 Porter’s Five Forces Model
 SWOT Analysis
The Firm’s External Environment
Analysis of Macro Environment
 Strategic Management
PESTEL Analysis for
Macro Environment
 What Environmental Factors are affecting the
Organisation?
 Which of these are the Most Important at the
Present Times? In the Next Few Years?

The PESTEL Framework Categorises

Environmental Influences into Six main types
 PESTEL Analysis (Contd.)
Environmental Influences
1. Political
2. Economical
3. Socio-cultural
4. Technological
5. Environmental
6. Legal
 PESTEL Analysis (Contd.)
 Looks at the Future Impact of Environmental
Factors, which may be different from their
Past Impact. This helps us in building a
Scenario.
 A Scenario is a detailed and plausible view
of how the business environment of an
organisation might develop in the future
based on grouping of key environmental
influences and Drivers of Change about
which there is a high level of uncertainty.
 PESTEL Analysis (Contd.)
 Structural Drivers of Change
– Structural Drivers of Change are likely to affect
the structure of an Industry, Sector or Market.
 For e.g.,
– Marketing Convergence Worldwide
– Cost Advantage
– Transference of Marketing
– Central Sourcing, etc.,
Porter’s Five Forces Model
Structural Drivers of Change
Porter’s Five Forces Model
Some of the Points to consider
Porter’s Five Forces Model
 Industries And Sectors
 An Industry is ‘a group of firms producing the
same principal product’.
 This concept of an industry can be extended into
the Public Services through the idea of a ‘Sector’
 Convergence is where previously separate
industries begin to overlap in terms of activities,
technologies, products and customers.
 Strategic Groups are organisations within an
industry with similar strategic characteristics
following similar strategies or competing on similar
bases
 Markets
 Market Segments
– Market Segmentation identifies Similarities and
Differences between groups of Customers or
Users
 Bases of Market Segmentation
 Understanding what customers Value
 Industries And Sectors – contd.
 The boundaries of an industry might also be
destroyed by forces in the Macro Environment.
– ‘e’ Commerce is destroying the boundary of traditional
retailing by offering various attractive choices
 Also study
– Sources of Competition using the Five Forces
Framework
– The Dynamics of Competition and
Hyper competition
Forces Driving Industry Competition
 Sources of Competition:
The Five Forces Framework
 The Threat of Entry, Entry Barriers
 The Threat of Substitution
 The Power of Buyers & Suppliers
 Competitive Rivalry
 The Life cycle Model
 SWOT Analysis
(Internal Analysis)
 SWOT is an acronym for the Internal Strengths and
Weaknesses of a firm and the Environmental Opportunities
and Threats facing that firm.
 SWOT Analysis is a technique through which Managers
create a quick overview of a firm’s strategic situation.
 Strength A resource advantage relative to competitors and
the needs of the markets a firm serves or expects to serve.
 Weaknesses A limitation or deficiency in one or more
resources or competencies relative to competitors that
impeads a firm’s effective performance
 Opportunity A major favourable situation in a firm’s
environment
 Threat A major unfavourable situation in a firm’s
environment
END OF PART II

?
 Next Session
 Competitive Profile Matrix (CPM)
 Globalisation & Industry Structure
 Resources, Capabilities and Competencies
 End of Session
Thank You!

28-10-2018 20