FORCES UK USA EUROPE SINGAPORE PAKISTAN INDIA AFRICA

Rivalry • Industry life-cycle

(i.e.,
growth/decline)

• Product life-cycle
(i.e.,
growth/decline)

• Complexity of
industry structure

• Brand identity

• Product
differences

• Size of fixed costs

• Exit barriers

• Industry under or
over capacity

• Corporate stakes

• End of season

• Switching costs

• Number and
diversity of
competitors

• International
complexity

• Concentration &
balance

• Economies of
scale and existing
competitive
advantages

Suppliers Aspects that May Create

Supplier Power
 • Differentiation of
products/services

• Presence of
substitute
products/services

• Importance of
volume to supplier

• Impact of
products/services
on cost or
differentiation

• Cost relative to
total purchases in
the industry

• Uniqueness of
products/services

• Size and
reputation of
supplier

• Switching costs of
suppliers and
firms in the
industry

• Supplier
concentration

• Supplier
good/credible
quality inputs

• Feasibility of
forward
integration
relative to
backward
integration by
firms in the
industry

Substitutes Aspects that May Support

or Hinder Substitution of
 Products and Services

• Economic outlook
(if economic
conditions are
good buyers tend
to buy from the
principal industry,
if economic
conditions decline
buyers may switch
to cheaper
substitutes)

• Price-performance
trade-off offered
by substitutes

• Buyer inclination
to substitutes

• Buyer perception
about substitute
quality and
differentiation

• Buyer switching
costs

Customers Aspects that May Create

Buyer Power

• Buyer awareness,
sophistication and
information
availability

• Buyer
concentration
against firm
concentration

• Buyer switching
costs relatively to
gains

• Brand identity
 • Presence of
substitute
products

• Price/total
purchases

• Impact on
quality/performan
ce

• Ability to
backward
integrate

• Product
differences

• Buyer earnings in
relation to
expenses
Buyer perception
and importance of
product service

• Decision maker’s
incentives

• Buyer price
sensitivity

• .

New Aspects that May Attract

Entrants or Deter New Entrants

• Economies of
scale

• Brand identity

• Capital
requirements

• Access to
resources

• Product design
and complexity
 • Gover]]nment
policy

• Legal &
Regulatory
requirements

• Cost
disadvantages

• Expected
retaliation

• Entrenched firms
cost advantages,
experience and
existing patents
and copyrights

• Entrenched firms
product
differences

• Access to
distribution
channels

• Sunk costs

• Entrenched firms’
brand equity and
customer loyalty

UK USA EUROPE SINGAPORE PAKISTAN INDIA AFRICA

Introduction 
Growth   
Maturity 
Saturation 
Decline 

PESTILE-MACRO ANALYSIS
 Americas Europe Asia
USA Canad South UK Franc Netherland Chin Japan
Variable
a America e s a
Political • Nationalisation + + + + + + + +
policy(reducing
control over the + + + + + + + +
market
- 0 0 - - - 0 -
• Instability in some
markets 0 - - 0 0 0 0 0

• - - - - - - - -

• WTO litigation
between
Bombardier and
Embraer

• Deregulation
removes barriers
to entry

Economic • Disposable income - - - - - - - -

• Depreciation of US - + + + + + + +
dollars
+ + + + + + + +
• Free trade policy
- - - - - - - -
• Currency
fluctuations, tariffs + + + + + + + +
and price controls

• Tax and duty on

imports and
exports

• Low per capital

income

Socio-Cultural • Global population + + + + + + + +

growth in
developing + + + + + + + +
countries.
+ + + + + + + +
• Increase in
average life
expectancy in
 western
civilization.

• Increase of
disposable income
in developing
countries.

Technological • High research and - - - - - - - -

development costs
+ + + + + + + +
• Technology to
boost production - - - - - - - -

• Pallet live storage - - - - - - - -

systems

• Pressure for lower

weight and lighter
materials

• Economies of scale

Legal and • Competition laws + + + + + + + +

Regulatory
• Employment laws, - - - - - - - -
Health and Safety
- - - - - - - -
• Environmental
laws

• Patent protection

Environmenta • Green issues - - - - - - - -

l and
• Climate protection - - - - - - - -
Ecological on charge
- - - - - - - -
•
+ + + + + + + +

External analysis

Three generic strategies

Examples of Cognitive Maps

Internal Analysis

Value Chain slide 4

Change management

Employees at the baseline

Ethical culture-staff performance, stability vs fluctuatuation

Good visuals, competitive advantage

Dealing future challenges