Future Topics In Industry and Competitive Analysis
- 1. CHAPTER:4 FURTHER TOPICS IN INDUSTRY & COMPETITIVE ANALYSIS Group Presentation : Team Brainiacs Aditya Jhunjhunwala Aditya Kumar Priyanka Kumari Priyanka Roy Poulami Ghosh
- 2. CONTENTS Extending the five forces framework Game theory Competitor Analysis Segmentation Strategic groups
- 3. EXTENDING THE FIVE FORCES FRAMEWORK
- 4. HYPERCOMPETITION • The porter five forces model based upon the assumption that industry structure determines competitive behavior, which in turn determines Industry profitability. • From Joseph’s point of view competition as a perennial gale of creative destruction. • Schumpeter viewed that competition is a dynamic process in which industry structure is constantly changing raises the issue of whether competitive behavior should be seen as an outcome of industry structure or a determinant of industry structure. • The general feature of industries in today’s world is hypercompetition. • It is intense and rapid competitive moves, in which competitors must move quickly to build advantages and erode the advantage of their rival.
- 5. THE CONTRIBUTION OF GAME THEORY • Game theory is the study of human conflict and cooperation within a competitive situation which allows us to model the competitive interaction by relegating competition to a mediating variable that links industry structure with profitability. • It offers two specially valuable contribution to strategic management: 1. It permit framing of strategic decision. 2. It can predict the outcome of competitive situation and identity optimal strategic choices.
- 6. 5 ASPECTS OF STRATEGIC BEHAVIOR FOR FIRM’S IMPROVEMENT Cooperation Deterrence Commitment Changing the structure of the game being played Signaling
- 7. COMPETITOR ANALYSIS AND COMPETITIVE INTELLIGENCE Competitor Analysis : - Identifying the competitors and evaluating their strategies to determine their strengths and weaknesses relating to those of their own product or service . Steps in Analyzing competitor . Identifying the company’s competitor . Assessing competitors objective, strategies, strengths and weaknesses and reaction patterns. . Selecting which competitors to attack or avoid
- 8. COMPETITOR ANALYSIS AND COMPETITIVE INTELLIGENCE • Competitive Intelligence :- Competitive intelligence involves the systematic collection and analysis of information about rivals for informing decision making. Competitive Intelligence has three main purpose • To forecast competitors’ future strategies and decisions. To predict competitors’ likely reactions to a firm’s strategic initiatives To determine how competitors’ behavior can be influenced to make it more favorable.
- 9. COMPETITOR ANALYSIS AND COMPETITIVE INTELLIGENCE • A Framework for predicting competitor behavior :- Competitive intelligence is not simply about collecting information. The problem is likely to be too much rather than too little information. The key is the systematic approach that makes it clear what information is required and for what purpose it will be used. Michael porter proposes a four part framework for predicting competitor behavior • Competitor’s current strategy Competitor’s Objective Competitor’s assumption about the industry Competitor’s resources and capabilities
- 10. COMPETITOR ANALYSIS AND COMPETITIVE INTELLIGENCE A framework for competitor analysis STRATEGY How is the firm competing? • OBJECTIVE • What are competitor’s current goals? • Is performance meeting these goals? • How are its goal likely to change? ASSUMPTIONS What assumptions does the competitor hold about the industry and itself? • RESOURCES AND CAPABILITIES • What are the competitor’s key strengths and weaknesses? PREDICTIONS What strategy changes will the competitor initiate? How will the competitor respond to our strategic initiatives?
- 11. SEGMENTATION ANALYSIS : THE PRINCIPAL STAGES • Identify key segmentation variables. • Construct a segmentation matrix • Analyze segment attractiveness. • Identify the segment ‘s key success factors. • Select segment scope: Potential for economics of scope across segments. Similarity of KSFs product differentiation benefits of segment focus. SEGMENTATION Segmentation refers to a process of dividing a large unit into various small units which have more or less similar or related characteristics.
- 13. STRATEGIC GROUPS A strategic group is a group of firms in an industry that follow the same or similar strategies . Identifying the strategic groups Identify the principal strategic variables which distinguish firms. Position each firms in relation to these variables Identify Clusters.
- 14. CONCLUSION The importance of competitive interactions between close rivals and learned an approach to analyze competitors and predicting their future behavior. The potential for complementary product to add value and the importance of strategies that can exploit the source of value. Segmentation analysis and strategic group analysis helps us in selecting an advantageous strategic position within an industry.