Industry canvas Flashcards
(30 cards)
Give two perspectives on business strategy?
- Core competencies, dynamic capabilities
- VRIN criteria
2. Industry-structure perspective - Competitive forces, industry transformation paths
- Barriers to entry and mobility, reconfiguration options
Name 5 things influenced by the of market concentration
- bargaining power
- economies of scale
- regulation,
- regulatory capture,
- lulling innovation):
Which factors influence market concentration?
- Market power: degree to which companies can influence prices
- Barriers to entry and mobility: obstacles preventing firms from industry entry
- Price discrimination: Charging different prices to different groups of customers
- Innovation: role in driving competition and improving market outcomes
- M&A: impact on market power, competition and consumer welfare
- Government regulation: addressing market failures and promote competition
- Antitrust law: promoting competition and protecting consumers
- Network effects: products/services increasing in value due to increase in number of users
- Information asymmetry: one party in transaction has more information than the other
Name two reasons why industry matters for company performance?
- Industry structure perspectives
- Structural aspects (market concentration!) influence companies’ competitiveness within industries
What are the three types of generic strategies from porter’s generic strategies framework?
- Cost leadership
- Differentiation
- Focus strategy
What is the generic strategy cost leadership?
designing a value chain to achieve a low-cost structure without reducing customer’s willingness to pay. The core to cost leadership is volume. Best for companies in industries close to perfect competition
Name three sources of cost benefits:
- Economies of scale
- Learning curve effects
- No-frills companies
What is the differentiation strategy as a generic strategy?
Designing a value chain to get a product or service for which customers are willing to pay more based on real or perceived value over a generic product. Core is customer loyalty
- Depends on differentiators such as quality, image, design, taste, and brand
What is focus strategy as a generic strategy?
Either on (1) general low-cost or (2) differentiation strategies to target a niche market. Core is managerial discipline
Why does a niche focus work?
- Different user classes have different needs
- More specific needs not easily covered by generic brands
- Niche companies can ask premium prices for meeting specific demands
What three factors can provide a first-mover advantage?
- Technological leadership
- Pre-empting asset positions
- Buyer switching costs
What is a first-mover advantage?
ability to achieve sustainable competitive advantage by establishing new business model or breaking ground on an entirely new product or services.
How can technological leadership cause a first-mover advantage?
forerunners have more time to build technological capabilities than late entrants
How can pre-empting asset positions provide a first-mover advantage?
Buying up critical assets before competitors notice their value. Can consist of pre-empting assets and locations or pre-empting market space
What is meant with pre-empting assets and locations?
Investment in production capacity and equipment
Investments in prime real estate
What is meant with pre-empting market space?
Investing in economic product-market space
Investing in socio-cognitive market space
How can buyer switching costs provide a first-mover advantage?
Build early customer base that finds it difficult of expensive to transition to offers of later entrants due to:
- Transaction-specific investments
- Search costs
- Contractual switching costs
Name three factors driving competitive performance of digital technologies?
- Increasing flexibility of products by supporting continuous evolution even after having reached market
- Lowering barriers across industries to favor connections, exchanges, and partnerships
- Supporting companies in accessing data streams properly
In what ways does digital transformation change business models?
through value creation, delivery, and capture
Name three ways in which industry context will influence the importance of AI
- AI adoption will occur across competing companies within industries
- AI will create economywide benefits rather than private rents
- Generic, explicit and myopic nature of AI poses strategic challenges
Name four elements of the Industrial Organization Economics Perspective?
- Companies compete through positioning within well-defined industries
- Value is created by companies
- Strategy defends market positions
- Industries have clear boundaries, structures and rules
Name four elements of a platform-based perspective?
- Competition shifts to competition across ecosystems
- Value co-created among users
- Strategy enables interaction and participation
- Data allows for development of new value streams, and platforms create value by enabling interactions
What is a platform?
company that enables value-enhancing interactions between independent users
Name the two possible platform structures?
- Open stucture
- Participative structure
