STRAMA - Lesson 2

60問 • 2年前

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arise when a company can take advantage of conditions in its industry environment to formulate and implement strategies that enable it to become more profitable.

Opportunities

arise when conditions in the external environment endanger the integrity and profitability of the company’s business.

Threats

can be defined as a group of companies offering products or services that are close substitutes for each other—that is, products or services that satisfy the same basic customer needs.

Industry

is a group of closely related industries.

Sector

are distinct groups of customers within a market that can be differentiated from each other on the basis of their individual attributes and specific demands.

Market segments

Industry boundaries may change over time as customer needs evolve, or as emerging new technologies enable companies in unrelated industries to satisfy established customer needs in new ways.

Changing industry boundaries

Michael E. Porter’s well-known framework

Five Forces model

Forces Model:

(1) the risk of entry by potential competitors, (2) the intensity of rivalry among established companies within an industry, (3) the bargaining power of buyers, (4) the bargaining power of suppliers, (5) the closeness of substitutes to an industry’s products, and (6) the power of complement providers (Porter did not recognize this sixth force).

are companies that are not currently competing in an industry but have the capability to do so if they choose.

Potential Competitors

Arise when unit costs fall as a firm expands its output.

Economies of Scale

Exists when consumers have a preference for the products of established companies.

Brand loyalty

Sometimes established companies have an ________ relative to potential entrants, meaning that entrants cannot expect to match the established companies’ lower cost structure

absolute cost advantages

arise when a customer invests time, energy, and money switching from the products offered by one established company to the products offered by a new entrant.

Customer switching costs

The competitive forces model predicts that falling entry barriers due to government deregulation will result in significant new entry, an increase in the intensity of industry competition, and lower industry profit rates, and that is what occurred here.

Government regulations

refers to the competitive struggle between companies within an industry to gain market share from each other.

Rivalry

refers to the number and size distribution of companies in it, something that strategic managers determine at the beginning of an industry analysis.

Industry Competitive Structure

consists of a large number of small or medium-sized companies, none of which is in a position to determine industry price. Examples of fragmented industries are agriculture, dry cleaning, health clubs, real estate brokerage, and sun-tanning parlors.

fragmented industry

is dominated by a small number of large companies (an oligopoly) or, in extreme cases, by just one company (a monopoly), and companies often are in a position to determine industry prices. Consolidated industries include the aerospace, soft drink, wireless service, and small package express delivery industries.

consolidated industry

is another determinant of the intensity of rivalry among established companies. Growing demand from new customers or additional purchases by existing customers tend to moderate competition by providing greater scope for companies to compete for customers.

Industry demand

The cost structure of firms in an industry is a third determinant of rivalry. In industries where fixed costs are high, profitability tends to be highly leveraged to sales volume, and the desire to grow volume can spark intense rivalry.

Cost Conditions

Economic, strategic, and emotional factors that prevent companies from leaving an industry.

Exit Barriers

refers to the ability of buyers to bargain down prices charged by companies in the industry, or to raise the costs of companies in the industry by demanding better product quality and service.

bargaining power of buyers

refers to the ability of suppliers to raise input prices, or to raise the costs of the industry in other ways—for example, by providing poor-quality inputs or poor service.

bargaining power of suppliers

dinal force: the products of different businesses or industries that can satisfy similar customer needs.

substitute products

are companies that sell products that add value to (complement) the products of companies in an industry because, when used together, the use of the combined products better satisfies customer demands.

Complementors

useful tool for analyzing the effects that industry evolution has on competitive forces is the industry lifecycle model.

Industry Life-Cycle Analysis

This model identifies five sequential stages in the evolution of an industry that lead to five distinct kinds of industry environment:This model identifies five sequential stages in the evolution of an industry that lead to five distinct kinds of industry environment:

embryonic, growth, shakeout, mature, and decline.

refers to an industry just beginning to develop (for example, personal computers and biotechnology in the 1970s, wireless communications in the 1980s, Internet retailing in the 1990s, and nanotechnology today).

Embryonic Industries

Once demand for the industry’s product begins to increase, the industry develops the characteristics of a growth industry.

growth industries

Explosive growth cannot be maintained indefinitely. Sooner or later, the rate of growth slows, and the industry enters the shakeout stage.

Industry Shakeout

The shakeout stage ends when the industry enters its mature stage: the market is totally saturated, demand is limited to replacement demand, and growth is low or zero.

Mature Industries

growth becomes negative for a variety of reasons, including technological substitution (for example, air travel instead of rail travel), social changes (greater health consciousness impacting tobacco sales), demographics (the declining birthrate damaging the market for baby and child products), and international competition.

declining industries

It is important to remember that the industry life-cycle model is a generalization. In practice, industry lifecycles do not always follow the pattern illustrated earlier. In some cases, growth is so rapid that the embryonic stage is skipped altogether.

life-cycle issues

Over any reasonable length of time, in many industries competition can be viewed as a process driven by innovation. Innovation is frequently the major factor in industry evolution and causes a company’s movement through the industry life cycle.

Innovation and Change

Another criticism of industry models is that they overemphasize the importance of industry structure as a determinant of company performance, and underemphasize the importance of variations or differences among companies within an industry.

Company Differences

Just as the decisions and actions of strategic managers can often change an industry’s competitive structure, so too can changing conditions or forces in the wider macroenvironment, that is, the broader economic, global, technological, demographic, social, and political context in which companies and industries are embedded.

Macroenvironment

forces affect the general health and well-being of a nation or the regional economy of an organization, which in turn affect companies’ and industries’ ability to earn an adequate rate of return.

Macroeconomic Forces

e four most important macroeconomic forces are:

the growth rate of the economy, interest rates, currency exchange rates, and inflation (or deflation) rates.

Over the last half-century there have been enormous changes in the world’s economic system.

Global Forces

Over the last few decades the pace of technological change has accelerated. This has unleashed a process that has been called a

Technological Forces

are outcomes of changes in the characteristics of a population, such as age, gender, ethnic origin, race, sexual orientation, and social class.

Demographic Forces

refer to the way in which changing social mores and values affect an industry. Like the other macroenvironmental forces discussed here, social change creates opportunities and threats.

Social Forces

are outcomes of changes in laws and regulations, and significantly affect managers and companies.

Political and Legal Forces

is a function of the height of the barriers to entry, that is, factors that make it costly for companies to enter an industry. The greater the costs potential competitors must bear to enter an industry, the greater the barriers to entry, and the weaker this competitive force.

risk of entry by the potential competitors

can be regarded as a threat because it depresses profits.

strong competitive force

can be viewed as an opportunity because it allows a company to earn greater profits.

weak competitive force

is the supply side of a market, and companies within the industry are the suppliers.

industry

are the demand side of a market and are the buyers of the industry’s products.

customers

constitutes a threat rather than an opportunity.

fragmented industry

companies are interdependent because one company’s competitive actions (changes in price, quality, etc.) directly affect the market share of its rivals, and thus their profitability.

consolidated

are the costs that must be paid before the firm makes a single sale.

fixed cost

An industry’s buyers may be the individual customers who consume its products (end-users) or the companies that distribute an industry’s products to end-users, such as retailers and wholesalers.

The Bargaining Power of Buyers

The organizations that provide inputs into the industry, such as materials, services, and labor (which may be individuals, organizations such as labor unions, or companies that supply contract labor).

The bargaining power of suppliers

Complementors

the former CEO of Intel, has argued that Porter’s original formulation of competitive forces ignored a sixth force: the power, vigor, and competence of complementors.

Andrew Grove

Growth at this stage is slow because of factors such as buyers’ unfamiliarity with the industry’s product, high prices due to the inability of companies to reap any significant scale economies, and poorly developed distribution channels.

embryonic industries

may also be the creation of one company’s innovative efforts, as happened with microprocessors (Intel), vacuum cleaners (Hoover), photocopiers (Xerox), small package express delivery (FedEx), and Internet search engines (Google). In such circumstances, the developing company has a major opportunity to capitalize on the lack of rivalry and build a strong hold on the market.

embryonic industries

the degree of rivalry among established companies usually increases.

declining industries

rivalry between companies can become intense

shakeout stage

constitutes a strong threat to profitability.

rivalry among established companies

MULTICULTURAL

rhyzza sanpedro · 135問 · 3年前

MULTICULTURAL