2.Industry Structures Flashcards
2.2) Sector Analysis
SCP Diagram
Industry Structure -> Firm Conduct -> Firm Performance
2.2) Sector Analysis
(SCP) Industry Analysis seek to examine
a) Industry Attractiveness
b) Key Success Factors
2.2) Sector Analysis
Sector Analysis pursue one overarching goal:
1) Understanding Industry Structure:
- Competitive Forces
- Threadsin micro-env.
2) Assessing Future Industry Profit Potential:
- Future ind. profit.
- adequate strategy
3) Identifying Positioning Options:
- Long-term profit potantial
- Favorable position
2.2) Sector Analysis
Industry Analysis 5-Step of GRANT
1) Industry definition
2) Actor identification
3) Structural Analysis
4) Dynamic Analysis
5) Action Scoping
2.2) Sector Analysis
Definition of Industry
“An industry is a group pf organization whose product have so many of the same attribution that they compete for the same buyer”
2.2) Sector Analysis
2 side of Substitutability
1) Demand side (buyers)
2) Competition side (manufacturer)
2.3) Competitive Forces
Micheal Porters 5 Competitive Forces:
1) Rivalry among existing Competition
2) Bargaining power of Supplier
3) Bargaining power of Buyer
4) Threat of New Entrance
5) Threat of Substitute Products and Servises
6) Bargaining power of Complements
2.3) Competitive Forces
Pitfalls to avoid in indutry analysis
1) Def. too broad/narrow
2) Making list instead of rigorous analysis
3) Paying equal attention
4) ignoring industry trends
5) Confusing cyclical changes
6) assess ind attractiveness and not strategic choices
2.4) Strategic Segmentation
Strategic Group analysis pursue one overarching goal:
1) Identifying Intra-Industry Cluster:
- Clusters/groups
- Strategic similarity
2) Understanding the Competition:
- competitive forces
- key success factors
3) Positioning the Organization:
- profit potential
- optimal position
2.4) Strategic Segmentation
Strategic Group Analysis 5-Step of GRANT
1) Variable Selection
2) Segment Definition
3) Segment identification
4) KSF identification
5) Segment Scoping
2.4) Strategic Segmentation
Group Analysis steps:
1) Select variables for x-y
2) Plot firms on map
3) Identify clusters of firms
4) Describe each cluster
2.4) Strategic Segmentation
-/+ of Group Analysis
+) shed light to competition
+) strategic niches
+) map of the strategic positioning
-) static
-) contigent segmentation variables
-)depenf on appropriate information
2.5) Key Success Factors (KSF)
types of Analysis for KSFs
1) Analysis of Demand
2) Analysis of Competition
2.5) Key Success Factors (KSF)
Profit pools are located along the value chain
1) Defining the Profit Pool
2) Estimating the Pool size
3) Disaggregating the Profit Pool
