...Strategy Contents Introduction 2 Aldi 3 Buyer's bargaining power: 4 Suppliers' bargaining power: 4 Threats of substitutes: 4 Threats of new entrants: 5 Recommendations 6 Bibliography 7 Introduction Retailers differentiate themselves from one and other, this terminates the consumer's perception of competing stores. This is promoted through the strategic development, the marketing‐oriented application of technology, and precise targeting of consumer demands. The author's Strategic Choice Grid indicates that, through insightful and innovative marketing, UK grocery retailers can avoid the stagnation threatened by saturation. Aldi Aldi started in 1946, when the Albrecht brothers took over their mother’s grocery store in Germany. According to (Ruddick, 2014) from the small provincial store, they built one of Germany’s biggest retailers, which is renowned for its low prices. Aldi arrived in the UK in 1990 and has opened over 500 stores and has over 9000 stores in 18 countries. Aldi’s product range specialises in their own brand, which are cheaper than well-known brand labels. This is because they can control their prices at its distribution level. Aldi does not only stock food products, they also stock items such as; underwear, toiletries and fishing equipment. Comparing Aldi to the four major supermarket chain retailers there is a stark difference to how they function to how Aldi functions. (Keynote, 2007) Illuminates that Aldi stocks around one thousand product...
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...should be used in their business by you, by giving them the relevant principles and especially examples of how to apply the principles to one of their SBU’s. Right now they use Porters five forces model quite well so there is no need to deal with that in depth – instead you need to discuss issues of how to identify an industry’s strategic groups, industry drivers and key success factors. Write down your structured notes for the presentation, convincing them to employ you to direct their external environmental analysis. Describe the corporation in your region (and its two or more SBU’s) its industry’s and its existing strategy making process in enough detail for the marker to assess the appropriateness of your presentation notes. The SBU you use as the core of your answer could be real or not. I will be presenting to the board of Woolworths supermarket chain in Australia. It consists of several SBU’s including (but not limited to) Fresh food & Grocery. Woolworths’ vision is to be “first choice for fresh food”. My external analysis below will focus on examples of how to apply the principles of external environment analysis to the fresh food business unit. What are the main industry drivers for Woolworths fresh food and what strategy changes are needed? While Porters Five forces analysis is essential in determining what kind of competitive forces Woolworth face, and how strong they are; in analysing the external environment...
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... range, value and everyday low prices. Woolworths is built on a passion for retail, attention to detail, working hard, ensuring the safety of their valuable customers and people, and having fun. Woolworth’s mission is to deliver to customers a better shopping experience - each and every time. The project initially carries out preliminary business analysis where it recognizes the market structure and describes the value chain in that industry segment that earns the companies income. Further analysis has been done about the changes that have been done in this segment in past two decades. Also the challenges Woolworths faces from its competitors are described. It identifies Porter’s five forces model influencing the company viz. Substitutes, Rival groups, Buyers, Sellers and Potential New Entrants. The project has done the strategic analysis of the industry’s current position and identified the likely challenges Woolworths may face in the near future. It also studies the various risks which has impact on the company such as “Cyclical risk”, “Policy risk” and “Exchange risk”. The project identifies the forces and does the analysis about how the company gets affected by three forces such as government policy, development of economy and interest risk. Finally the report selects one of Porter’s three generic strategies of product differentiation for the company to sustain the competition. TABLE OF CONTENTS About the industry...
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...4th Quarter 2010 | 25(4) THEME OVERVIEW: FUNDAMENTAL FORCES AFFECTING AGRIBUSINESS INDUSTRIES Kent Olson and Mike Boehlje JEL Classifications: Q13, L10, L22, M22, L80 Keywords: Agribusiness, Market Forces, Structural Change, Porter’s Five Forces Agribusiness industries are facing numerous challenges and opportunities resulting from various fundamental forces. An understanding of the forces that are shaping and shifting the competitive landscape is useful to not only understand the strategic positioning decisions of the firms in these industries, but also the dramatic structural changes that are occurring in the food production, processing and distribution sector. This series of articles discusses the fundamental forces creating change in the agribusiness industries, and how companies and decision-makers are being affected by, and adapting to, changes in these forces. We frame this discussion using the analytical concepts of value chains and Porter’s Five Forces. We describe the agribusiness value chain as two chains which become one at the consumer end (Figure 1). One value chain follows plants and plant products, and another chain follows animals and animal products. These two chains blend into one chain at the processing and retailing stages of the chain. We also view the value chain rather simply as four stages: (1) input suppliers; (2) producers; (3) processors and handlers; and (4) retailers. While the value chain could be viewed as specific for different products...
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...Understanding the dynamics of competitors within an industry is critical for several reasons. First, it can help to assess the potential opportunities for your venture, particularly important if you are entering this industry as a new player. It can also be a critical step to better differentiate yourself from others that offer similar products and services. One of the most respected models to assist with this analysis is Porter’s Five Forces Model. This model, created by Michael E. Porter and described in the book “Competitive Strategy: Techniques for Analyzing Industries and Competitors,” has proven to be a useful tool for both business and marketing-based planning. Background The pure competition model does not present a viable tool to assess an industry. Porter’s Five Forces attempts to realistically assess potential levels of profitability, opportunity and risk based on five key factors within an industry. This model may be used as a tool to better develop a strategic advantage over competing firms within an industry in a competitive and healthy environment. It identifies five forces that determine the long-run profitability of a market or market segment. * Suppliers * Buyers * Entry/Exit Barriers * Substitutes * Rivalry Supplier power * Supplier concentration * Importance of volume to supplier * Differentiation of inputs * Impact of inputs on cost or differentiation * Switching costs of firms in the industry * Presence of...
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...and a presentation. It is a formal project write-up, which should not exceed 30 pages. Each group should have no more than 6 members and no less than 3 members. You will be working for those companies who are going through problems regarding managerial issues within organizational context. Your course instructor will select these companies. Your main task is to find out why management of the company of your interest is going through problems and how to solve this. At first you will scan the current scenario and after analyzing and anticipating the problem, you will come up with a set of action plans as your recommendations to solve the management related issues. You will make your analysis and judgment on the basis of following dimensions: • Managerial Functions • Environmental analysis (PEST) • Organizational Behavior (Culture) • Human Resources Practices • Corporate Social Responsibilities You can also use effective tools like and porter’s five forces model, Carroll’s pyramid, MBO scanning and other tools that you will be learning throughout the semester. Format of the write-up: You can use Times new Roman font, 12 or Verdana, 11 or Arial 11. Line spacing should be 1.5 with uniform margin of 1 inch. You must include: • Top Sheet (including you name, ID, section number and project title) • Letter of acknowledgment • Table of Content • Main write up • References...
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...The problems: that have been created due to a well-established product line and target demographic, in a challenging industry environment, facing declining growth and changes in corporate structure and ownership. The case represents the opportunity for students to analyze the effectiveness of organizational strategy and goals. No long term strategic planning (no vehicle growth) Goal: Is to keep the business healthy, keep inventories in line and keep moving forward. We ……. (page209) Goal analysis: SMART PESTLE analysis: It gives an overview of the different macro environmental factors that the company has to take into consideration. It is a useful tool for understanding risks associated with market growth or decline, and as such the position, potential and direction for a business or organization. P (Political): not mentioned in the case E (Economic):1) according to Philadelphia based marketing consultry there were 38 million young people between the ages of 11 and 19 In US, buying power per year is about $2000 per capita. 2) Decline in profit because of currency factor and lower demand in Europe. S (Social): 1) there were 38 million young people between the ages of 11 and 19 in the U.S at the beginning of 2006. Also, there were 27.6 million people from 6 to 12 years old. 2) The number of American ages 25 to 34 was expected to rise to 5.2% of the population by 2010, but those ages 12 to 18 were forecasted to fall by 3.3%. 3) Socio-cultural issues included the worry...
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...The Five Forces Model of Competition The model above is known as the Five Forces Analysis which was designed and created by Michael Porter of Harvard Business School. Each shape defines the five forces that shape competitive rivalry and is relevant to industry profitability. Each new entrant to an industry faces competitive pressures from: • Buyer bargaining power and seller buyer collaboration. • Companies in other industries to win buyers over to substitute products. • Supplier bargaining power and supplier-seller collaboration. • The threat of new entrants into the market. • Rivalry among competing sellers to attract new customers. For a new entrant to the automobile industry there is generally a very low threat. In order for a new entrant to be successful they must be able to mass-produce. Due to the expense of mass production, a new entrant must have a large amount of capital to compete in the automobile industry. Buyers and customers both have high bargaining power when purchasing an automobile. Buyer power is strong when a consumer has a multitude of products to choose from. An example would be choosing to purchase a Ford Expedition or Chevrolet Tahoe. Both are similar in size, gas mileage per gallon, seating and engine size. Each vehicle is produced by a different manufacturer which gives the consumer the ability to create competition. In addition manufacturers are forced to create quality automobiles in order to maintain customer...
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...Group Work: Financial Statement Analysis of your selected listed Bangladeshi company Guideline for Term Paper Dear All, Please complete the strategy analysis and accounting analysis based on the following guideline by next 2 weeks for the company allocated to your group for term paper, and give me the update. Topic Specific Topics Key Questions Strategy Analysis Industry Analysis (Five forces Model) Rivalry -How do firms in an industry rivalry compete among themselves? -What are the dimensions of the competition? Threat of new entrants -What are the legal entry barriers for a new firm? -What are the economic entry barriers for a new firm? Threat of substitute products -Is there any substitute products of the industry? -If so, What is the level of price difference with substitute product? Bargaining power of buyers -What is level of buyers’ price sensitivity? -What is the buyers’ relative bargaining power? Bargaining power of suppliers -How many numbers of suppliers? -How much critical the product is to buyers? Competitive Strategy Analysis Which competitive strategy the company has taken? Cost leadership or Differentiation Corporate Strategy Analysis -Are there significant imperfections in the product, labor or financial markets in the industry in which the company is operating? - Does the company have special resources such as brand names, proprietary know how, access to scarce distribution channels, and special organization...
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...Title: The Fall of IBM Date: September 20, 2013 I. Executive Summary The purpose of this case study analysis is to analyze the situation of IBM in the 1990s, to come up with possible mutually exclusive alternatives for IBM’s management and ultimately, to recommend a possible strategy to regain back IBM’s throne in the industry. The problem of the case study is all about the survival of IBM in a much more competitive market ever encountered by the company. And also, overcoming new challenges brought about IBM’s new management and the dynamic technological environment. The methods of analysis used for this case study are the Porter’s Five Forces Model and the ANSOFF matrix analysis. Brief explanations were provided in each of the methods used for analysis. After analyzing the case study, the following three mutually exclusive alternative course of action were developed: 1. Decentralize Management; 2. Invest heavily on research and development and; 3. Partner with suppliers From the alternatives, I recommend that IBM should partner with its suppliers. Collaboration with suppliers will increase business flexibility and executive level business decision support. This will surely bring the most benefit for the company among the other alternatives course of action. The suppliers play a great role in the industry and having strong connections with them can help the company survive and even excel in the industry. Outline and Implementation: ...
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...Ratchathani University, Thailand ABSTRACT The competition in Thailand sweet corn industry relatively high: Bargaining power of suppliers: supplier concentration, availability of substitute input, importance of suppliers’ input to buyer and importance of industry to supplier; Intensity of Rivalry of rivalry among existing competitors: number of competitors, augmented capacity in large increments, value of fixed costs and exit barriers; Threat of entrants or potential competitors: economical scale; Determinant of buyer power: product differentiation, switching costs to use other products, switching costs to use other products and buyers’ use of multiple sources, threat of substitute products or services relatively low. Keywords: Environment analysis, Competitive Forces, Competitiveness Porter’s Five Forces, Sweet Corn, Agribusiness 1. Introduction Sweet corn is a major economic agronomy in Thailand. There are large amounts of consumption and utilization of sweet corn each day. The sweet corn is a perennial plant providing greater values to fresh markets and industrial factories. Recently, sweet corn is one of the most popular crops; the 2011 Thai Food Processors’ Association report revealed that there were 29 factories of sweet corn manufacturers, and 64,000 hectares of plantation areas, and more than 35,000 farmers involved. Producing 544,000 tons of sweet corn, Thailand ranks third worldwide, with a 190 million USD increase from the year 2010, and an export value of 170.26millionUSD...
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...1) What are the three parts of sustainability? Social Environment Economic 2) What did Michael Porter come up with? A)Reinnovation B) The Five Forces concept C) sustainability 1) Which country was used as a subject to test the potential benefits from entrepreneurship and innovation in developing countries? (a) Haiti (b) Uganda (c) Ghana (d) Latvia 2) According to the article pertaining to innovation in developing nations, there is a positive relationship between ___________ and __________. (a) education, rate of income (b) cultural barriers, economic development (c) firm size, innovation 3) T/F As a benefit of service innovation, it is believed that users have valid, innovative, useful, and creative ideas. True A unique approach to innovations produces _______ innovation verse a typical strategy that produces ________ innovation. a) radical/incremental b) greater/less c)less/greater d) incremental/radical What is not one of Porters 5 forces for competitive strategy? a) Rivalry b) Substitutes c) Consumer power d) Barriers and entry 1. The adoption of a radical process innovation is significantly promoted THE MOST by: A. Large company size B. The presence of a champion C. Technology policies D. Sustainability Answer: B 2. Which of the following factors DOES NOT impact how well a company innovates? A. Company size B. Level of education C. Race D. Amount of resources Answer: C What factor could influence...
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...Michael Porter’s Five Forces Model (5FM) was published in 1980 and since then has been used extensively to analyse the environment that a firm is operating in or intends to enter. The author uses an extra force which was added to the original 5 by the then C.E.O of Intel Andrew Grove. This force was called the complementors which Prasad feels has enhanced the model further. Complementors refer to the role played by external factors on a firm’s environment. For example the role played by the Irish government in the Irish airline industry with the control of the airports by the Dublin airport Authority (DAA) and not allowing a private company (Ryanair) build a new terminal at Dublin airport. It is used to understand the strategic position of the firm in relation to the extensive forces it has to deal with in an effort to be profitable. If the firm has a clear understanding of its strengths it can take advantage of them but also in case of weaknesses it can improve their situation and avoid making costly errors. It has traditionally been used to assess if new products/services or new markets will be profitable and to decide suitable strategies going forward. “Who controls the present controls the past; who controls the past controls the future.” (George Orwell) In the article the author (Ajit Prasad) asserts that although the 5FM is useful but in order for a firm to assess its ability to enter a new market, it is vital for the decision maker to understand the culture and the history...
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...1.6 Industry Analysis Porter’s Five Forces: Assessing the Balance of Power in a Business Situation The Porter's Five Forces tool is a simple but powerful tool for understanding where power lies in a business situation. This is useful, because it helps you understand both the strength of your current competitive position, and the strength of a position you're considering moving into. With a clear understanding of where power lies, you can take fair advantage of a situation of strength, improve a situation of weakness, and avoid taking wrong steps. This makes it an important part of your planning toolkit. Conventionally, the tool is used to identify whether new products, services or businesses have the potential to be profitable. However it can be very illuminating when used to understand the balance of power in other situations. Here we assess the balance of power of Bangladesh Auto Cars Limited in the business. * Threat of New Entrants: There is a huge threat of new entrance in this industry because the new business doesn’t need any specialize knowledge to start. The cost of equipments can be less if they go for lease because lease and loans are available. There are only two companies in industry which make easy for the newer ones. * Threats of Substitute: CNG conversion and CNG refueling is cost effective and good for environment and this process is quiet new so there are no substitute products. It’s a monopoly business for these companies. *...
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...describe the three important organizational resources within it – people, information, and information technology. 2. Describe how to use break-even analysis to assess the financial impact of information technology. 3. Describe how to use Porter’s Five Forces Model to evaluate the relative attractiveness of and competitive pressures in an industry. 4. Compare and contrast Porter’s three generic strategies and the run-grow-transform framework as approaches to the development of business strategy. CHAPTER SUMMARY This chapter serves two primary purposes. First the chapter introduces your students to the broad notion of management information systems within an organization and the three key resources on which MIS focuses – people, information, and information technology. Second, the chapter jumps right into the process of appropriately selecting which technologies to use based on the industry in which your organization operates, the identified business strategies for competing in that industry, and how to assess the impact of technology. The primary sections of this chapter include: 1. MIS Resource #1: Information 2. MIS Resource #2: People 3. MIS Resource #3: Information Technology 4. Financial Impact of IT: Break-Even Analysis 5. Industry Impact of IT: Porter’s Five Forces Model 6. Strategy Impact of IT: Porter (Again)...
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