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What Is Strategy
What Is Strategy
What Is Strategy
FOLLOWED BY
IMPLEMENTATION
Strategic Options
Functional Policies
INDUSTRY ANALYSIS
COMPETITOR ANALYSIS
COMPETITIVE ADVANTAGE
Industry Analysis
Potential entrants
STRATEGY ANALYSIS
Suppliers
Internal rivalry
Buyers
Substitutes
Potential entrants
Industry Analysis
Suppliers
Internal rivalry
Buyers
Substitutes
Potential entrants
Industry Analysis
Suppliers
Internal rivalry
Buyers
Threat of Entry
Capital requirements Economies of scale Product differentiation Switching costs Access to distribution First mover advantages Industry growth Strength of established competitors
Substitutes
Threat of Substitutes
Potential entrants
Industry Analysis
Suppliers
Internal rivalry
Buyers
Substitutes
Relative concentration Impact on supplier volume Impact on buyer cost Impact on buyer quality Product differentiation Switching costs Threat of forward / backward integration Industry profitability
Competitor Analysis
INDUSTRY ANALYSIS
COMPETITIVE ADVANTAGE
COMPETITOR ANALYSIS
STRATEGY ANALYSIS
Beware of competitive blind spots: Escalation of commitment Overconfidence in judgment Self-centered view of strategic implications Look out for competitors' Past behavior Commited positions Strategic or related businesses
INDUSTRY ANALYSIS
COMPETITOR ANALYSIS
COMPETITIVE ADVANTAGE
Strategy Analysis
STRATEGY ANALYSIS
Evaluate past performance Make deductions from observed actions Identify what unites the various observed elements into a coherent strategy Analyse what prevents imitation Diagnose problems that are likely to arise
Competitive Advantage
Same product at lower cost Price premium from unique product
Cost leadership
Differentiation
Cost leadership
The firms advantage rests on its ability to produce a standard product at a lower cost than any other competitor. The firm is thus well positioned to compete on price. Economies of scale Learning and experience
Unit cost $10 $7 $4.9 Competitor A Competitor B Competitor C
100
200
400
Cumulated production
Differentiation
The firms competitive advantage rests on its ability to confer a unique character on its product or service. Differentiation thus makes it possible to avoid direct price competition. Must be perceived as very significant by the customer (perception is more important than reality) Must be hard to imitate Must be economically viable (difficult to find cost-price-volume combination)
Differentiation
Cost leadership
Market share
products services business processes business models management and culture policy and society