STRATEGIC MANAGEMENT CHAPTER-4 REVISION · STRATEGIC MANAGEMENT CHAPTER-5 REVISION Rivalry Tends to...
Transcript of STRATEGIC MANAGEMENT CHAPTER-4 REVISION · STRATEGIC MANAGEMENT CHAPTER-5 REVISION Rivalry Tends to...
STRATEGIC MANAGEMENT REVISIONCHAPTER-4
STRATEGIC MANAGEMENT REVISIONCHAPTER-4
STRATEGIC MANAGEMENT REVISIONCHAPTER-5
COMPETITION ANALYSIS
5ForcesModel
MichaelPorter
Forces Process(Steps)
i)Rivalryamong�irm
ii)ThreatofNewentrant
iii)ThreatofSubstituteProduct
iv)BargainingPowerofSupplier
v)BargainingPowerofBuyer
Step1:IdentifyPressuresassociatedwitheachforce
Step2:EvaluatehourStrongthepressurecomprisingeachof�iveforcesare
Step3:Determinewhetherthecollectivestrengthofthe�ivecompetitiveforcesisconductivetoearningattractivepro�its
3Steps
STRATEGIC MANAGEMENT REVISIONCHAPTER-5
RivalryTendstobecutthroatandpro�itabilitylowwhen:
i)NowClearleaderii)Competitorsinindustryarenumerousiii)Competitorsoperatewithhigh�ixedcostiv)Highexitbemeansv)LittleOpp.todifferentiateofferingsvi)Industryfacesslowgrowth
RIVATRY AMONG FIRM
q
Threat of New Entrants
PowerfulsourceofcompetitionMayreducepro�itabilityPressuresintermsof:
uProductrange uLowPrice uBigSize�irm uBrandImage
CapitalRequirement
Larger Capital Requirement
Threat of Substitute Product
Pressures:
*AdvanceTechnology*Price*UsefulLife*Availability*Easeofuse
q
Bargaining Power of Buyers
In�luencePrice&Qualityq
q
FactorsIn�luencing
•CartelFormedbyBuyer•BigBuyers•KnowledgeofSubstitutes•NumberofBuyers•UndifferentiatedProducts
Bargaining Power of Suppliers
q
FactorsIn�luencing:
•VolumeofPurchase•No.ofSuppliers•Availabilityofresource•UnavailabilityofSubstitutes•HighSwitchingCosts
EconomiesofScale
• Reduced per-unit cost• High volm at lower cost
ProductDifferentiation
Physical or perceptual difference in eye of cust.
SwitchingCost
High Cost
"Brand Identity of product"Infrequent"Vantly Purchased Product
BrandIdentity
Accesstodistributionchannel
Unavailability of distribution
ChanneltoNewEntrant
Aggressive retaliation : Through pricing, advertising etc.
STRATEGIC MANAGEMENT REVISIONCHAPTER-5
COMPETITIVE STRATEGY