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Chapter Title


 
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16/e PPT 

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ersta
i  the Factors that
Determi e a Compa s Situatio
‰ Diagnosing a company¶s situation has two
facets
Assessing the company¶s O
O
 
OO

ü „ndustry and competitive conditions
ü Forces acting to reshape this environment
Assessing the company¶s 
O
 
OO

ü carket position and competitiveness
ü Competencies, capabilities, resource strengths
and weaknesses, and competitiveness
3-2
Fi 31: From Thi i  Strateicall about the
Compa s Situatio to Choosi  a Strate

3-3
Fi 3: The Compo e ts of a Compa s Macro-e iro me t

3-4
 Thi i  Strateicall about a
Compa s Macro-e iro me t
‰ A company¶s macro-environment includes all OO


 O O outside its boundaries
‰ Diagnosing a company¶s external situation involves
assessing 

O 

 
that have a
bearing on the decisions a company¶s makes about its
Direction
Objectives
Strategy
Business model
‰ Requires that company managers  

OO
OOO
to
„dentify potentially important external developments
Assess their impact and influence
Adapt a company¶s direction and strategy as needed
3-5
 Ñe Questio s Rear
i  the
I
ustr a
Competitie E iro me t

What are the

i
ustrs

omi a t
eco omic traits?

What forces
How stro  are
are
rii 
competitie
cha e i the
forces?
i
ustr?

What maret What are the How attractie

positio s
o e factors for is the i
ustr
rials occup? competitie from a profit
What moes will
success? perspectie?
the mae ext?
3-6
 Questio 1: What are the I
ustrs
Domi a t Eco omic Traits?
‰ carket size and growth rate
‰ Number of rivals
‰ Scope of competitive rivalry
‰ Buyer needs and requirements
‰ Degree of product differentiation
‰ Product innovation
‰ Supply/demand conditions
‰ Pace of technological change
‰ Vertical integration
‰ Economies of scale
‰ Learning and experience curve effects
3-7
3-8
 Questio : What Ñi
s of Competitie
Forces Are I
ustr Members Faci ?

‰ Objectives are to identify

cain  O of competitive forces

^
O
 of these forces

‰ Key analytical tool

ºOº OO
 O



3-9
Fi 33: The Fie Forces Mo
el of Competitio

3-10
 A al i  the Fie Competitie Forces:
How to Do It
^
O: O
  the specific O

O
OO associated with each of
the five forces

^
O: ë
O the 
O
 O 

O

O  O -- fierce, strong,
moderate to normal, or weak?

^
O: O
OOwhether the O
O


O
 of the five competitive forces
is conducive to earning attractive profits
3-11
Fi 3
: Weapo s for Competi  a
Factors
Affecti  Stre th of Rialr

3-12
Fi 3: Factors Affecti  Threat of E tr

3-13
Fi 36: Factors Affecti  Competitio From Substitute Pro
ucts

3-14
Fi 3: Factors Affecti  Barai i  Power of Suppliers

3-15
Fi 3 : Factors Affecti  Barai i  Power of Buers

3-16
Questio 3: What Factors Are Drii  I
ustr
Cha e a
What Impacts Will The Hae?

‰ „ndustries change because  O

are  industry 
 

to 
O
O

‰   O are the
O O
of changing industry and
competitive conditions
‰ here do   O
O
Outer ring of macroenvironment
„nner ring of macroenvironment
3-17
3-18
 Questio
: What Maret Positio s
Do Rials Occup?

‰ One technique to reveal

 OO
 O

O

of industry rivals is


O 

‰A 

O  is a
cluster of firms in an industry
with similar competitive
approaches and market positions
3-19
 Strateic Group Mappi 

‰ Firms
in O

O  have two or more
O

O 
O
  in common
pave comparable product line breadth
Sell in same price/quality range
Emphasize same distribution channels
Use same product attributes to appeal
to similar types of buyers
Use identical technological approaches
Offer buyers similar services
Cover same geographic areas

3-20
 Questio : What Strateic Moes Are
Rials Liel to Mae Next?
‰A firm¶s uO


O O are affected by
Current strategies of competitors
Future actions of competitors
‰ Profiling
key rivals involves gathering
O

O
OO O about
Current strategies
cost recent actions and public announcements
Resource strengths and weaknesses
Efforts being made to improve their situation
Thinking and leadership styles of top executives
3-21
 Competitor A alsis

‰ ^

OOand competitive 
O


and OOO of  involves assessing
hich rival has the best strategy? hich
rivals appear to have weak strategies?

hich firms are poised to gain

market share, and which ones
seen destined to lose ground?

hich rivals are likely to rank among the industry

leaders five years from now? Do any up-and-coming
rivals have strategies and the resources to overtake the
current industry leader?
3-22
 Questio 6: What Are the Ñe
Factors for Competitie Success?
‰ KSFs are those competitive factors most affecting
OO
OuO  ability to prosper
‰ KSFs concern
Specific strategy elements
Product attributes
Resources
Competencies
Competitive capabilities
that a company needs to be competitively successful
‰ Ñ^º are attributes that spell the  OO O between
Profit and loss
Competitive success or failure
3-23
3-24
Questio : Does the Outloo for the I
ustr
Prese t a Attractie Opportu it?
‰ „nvolves assessing whether the industry
and competitive environment is 


O
or 


O for earning good profits
‰ Under O
  
 O! a "O
O


O in an 
OO


O

  still O unusually good  

Attractiveness is relative, not absolute
Conclusions about attractiveness have
to be drawn from the perspective of a
particular company

3-25