Bu-481 Business Policy, Section C

Lynn Gazzola, Class 13

Superior Profitability:
Prospects for
Realize
Risk/reward ratio
First Question: How attractive is the opportunity?

Market size and growth

Use: PEST/BEAM
Market cyclicality
Present and future completion
Degree of fragmentation
Ease of channel access
Use: Porters 5
Breakeven share
Forces

Second Question: How sustainable is the competitive advantage?

Supply side barriers
Use: VRIO/RBV
o Distinctive capabilities
o Technology
o Economies of scale/scope
Use: Porters 5
Demand side barriers
Forces
o Customer channel relationship
o Brand equity
Third Question: Prospects for successful implementation?
Feasibility skills and resources
Supportability understood and committed to the strategy links to
management preferences
Consistency hold together
Fourth Question: Are the risks acceptable?
Robustness (if it is robust it can be successful under a number of different
assumptions) [the broader the range of assumptions under which the
strategy can be successful the better it is]
Assumptions
Fifth Question: Financial
Cash flow