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1、Chapter 2: Strategy AnalysisCopyright (c) 2008 Thomson South-Western, a part of the Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Chapter 2: Strategy AnalysisPalepu & HealyThe Importance of Strategy AnalysisStrategy drives the actions of an
2、organization.Studying a firms strategy provides:An understanding of what drives risks, profitability, and competitive advantagesA basis for future performance to be forecastedAn idea of how to measure the success of a firms actionsCopyright (c) 2008 Thomson South-Western, a part of the Thomson Corpo
3、ration. Thomson, the Star logo, and South-Western are trademarks used herein under license. Chapter 2: Strategy AnalysisPalepu & HealyKey Concepts in Chapter 2The importance of industry-level analysisPorters “five forces” framework for industry analysisCompetitive strategy analysis of the firmCorpor
4、ate strategy analysis for multi-business organizationsCopyright (c) 2008 Thomson South-Western, a part of the Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Chapter 2: Strategy AnalysisPalepu & HealyThe Importance of Industry-Level AnalysisA
5、firms strategy is heavily influenced by the industry it belongs to.Understanding the environment and competitive forces within an industry helps with evaluating the quality of a particular firms strategy.Porter created a useful framework to evaluate the competitive forces at work in an industry, as
6、seen in Figure 2-1.Copyright (c) 2008 Thomson South-Western, a part of the Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Chapter 2: Strategy AnalysisPalepu & HealyIndustry Structure and ProfitabilityCopyright (c) 2008 Thomson South-Western,
7、a part of the Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Chapter 2: Strategy AnalysisPalepu & HealyCompetitive Force 1: Rivalry Among Existing FirmsHigher degrees of competition among firms: Push prices towards the marginal cost of produc
8、tion.Make non-price dimensions of products or services more important.Determinants of the intensity of competition among firms:Industry growth rate.Concentration and balance of competitors.Copyright (c) 2008 Thomson South-Western, a part of the Thomson Corporation. Thomson, the Star logo, and South-
9、Western are trademarks used herein under license. Chapter 2: Strategy AnalysisPalepu & HealyRivalry Among Existing Firms, continuedDeterminants of the intensity of competition among firms:Degree of differentiation in products and services and switching costs.Scale/Learning economies and ratio of fix
10、ed to variable costs.Excess capacity and exit barriers.Copyright (c) 2008 Thomson South-Western, a part of the Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Chapter 2: Strategy AnalysisPalepu & HealyCompetitive Force 2:Threat of New Entrants
11、The ease with which a new firm can enter an industry will affect the profitability of other firms within the industry.Factors affecting the barriers to entry are:Economies of scaleFirst mover advantageRelationships with suppliers and customersLegal barriersCopyright (c) 2008 Thomson South-Western, a
12、 part of the Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Chapter 2: Strategy AnalysisPalepu & HealyCompetitive Force 3: Threat of Substitute ProductsThe degree to which substitute products or services exist affects the industrys bargaining
13、 power with suppliers and customers, and ultimately profitability.The degree to which substitutes exist depends upon the relative price and performance of competing products or services, and the willingness of customers to accept substitutes.Copyright (c) 2008 Thomson South-Western, a part of the Th
14、omson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Chapter 2: Strategy AnalysisPalepu & HealyCompetitive Force 4:Bargaining Power of BuyersBuyer bargaining power can exert downward pressure on prices.Factors that can affect this bargaining power ar
15、e:Buyer price sensitivity to product or serviceRelative bargaining power of buyers Copyright (c) 2008 Thomson South-Western, a part of the Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Chapter 2: Strategy AnalysisPalepu & HealyCompetitive Fo
16、rce 5:Bargaining Power of SuppliersA mirror image of the bargaining power of buyers.Suppliers have bargaining power when there are few substitutes and/or few suppliers relative to the number of customers demanding a product or service.Copyright (c) 2008 Thomson South-Western, a part of the Thomson C
17、orporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Chapter 2: Strategy AnalysisPalepu & HealyApplying Industry Analysis to the Personal Computer Industry Despite the sales volume and ubiquity of the product, profitability in the industry was low.Competiti
18、ve forcesBargaining power of suppliers and buyersCopyright (c) 2008 Thomson South-Western, a part of the Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Chapter 2: Strategy AnalysisPalepu & HealyCompetitive Strategy AnalysisIndividual firms mu
19、st choose appropriate strategies to succeed within their industry segment.Two basic competitive strategies are:Cost leadershipProduct / service differentiationFigure 2-2 conveniently summarizes aspects of cost leadership and differentiation.Copyright (c) 2008 Thomson South-Western, a part of the Tho
20、mson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Chapter 2: Strategy AnalysisPalepu & HealyStrategies for Creating Competitive AdvantageCopyright (c) 2008 Thomson South-Western, a part of the Thomson Corporation. Thomson, the Star logo, and South-
21、Western are trademarks used herein under license. Chapter 2: Strategy AnalysisPalepu & HealyAchieving and Sustaining Competitive AdvantageChoice of strategy is an important first step for a firm. The likelihood of achieving and sustaining competitive advantage must be evaluated.Factors to evaluate i
22、nclude:Resources and capabilities to implement strategies.Whether the firms activities, infrastructure, and other operating elements consistent with its competitive strategy.Copyright (c) 2008 Thomson South-Western, a part of the Thomson Corporation. Thomson, the Star logo, and South-Western are tra
23、demarks used herein under license. Chapter 2: Strategy AnalysisPalepu & HealyApplying Competitive Strategy Analysis to the Dell Computer CorporationHow was Dells growth in income and market share achieved and sustained?Low-cost competitive strategyDistribution channelMass customizationOutsourcing se
24、rviceCash managementInvestment in R&DCopyright (c) 2008 Thomson South-Western, a part of the Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Chapter 2: Strategy AnalysisPalepu & HealyCorporate Strategy AnalysisCompanies with multiple business
25、segments require an analysis how the separate segments are managed within the corporate governance structure.Factors to analyze include:Transaction costsSpecific benefits to operating under one corporate umbrellaThe case of General Electric.Copyright (c) 2008 Thomson South-Western, a part of the Tho
26、mson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Chapter 2: Strategy AnalysisPalepu & HealyConcluding CommentsThe industry analysis approach has notable strengths and some limitations.Porters “five forces” framework is valuable in evaluating the strategy and actions of firms within an industry.Copyright (c) 2008 Thomson South-Western, a part of the Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Chapter 2: Strategy AnalysisPalepu & Healy
