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Xyz: Rivalry

In:

Submitted By Sakshi11
Words 453
Pages 2
Moving ahead of industry analysis……..

Rivalry Among Existing Competitors
Al CR4 HHI Coal Steel 0.813 0.238 90 14.3% -0.33 55.72 45.92 0.026 Auto 0.671 0.153 ----18.0% 0.18 --------0.051 0.949 0.570 0.438 0.124 150 14.5% -0.80 28.59

Numerous or equally balanced competitors Slow growth industry Low profitability High fixed costs (Breakeven) Lack of differentiation or switching costs High exit barriers

Price/M 160 T Ind. Growth Profits/ Sales BE/MT AVC/M T Diff/Sal es 4.8% -0.16 8.46

63.36 20.82 0.014 0.010

Structure

Conduct

Performance

Strategic Groups‐ an example Of the Paper Industry

Strategic Groups
• Firms within an industry differ systematically in traits other than size, so that industry contains subgroups of firms • Firms within a group are somewhat homogeneous and recognize their mutual dependence. • Barriers to entry become specific to the group‐ Mobility barriers.

Three Generic Strategies
Uniqueness perceived by customer Low Cost Position Industry wide
S T R A T E G IC T A R G E T

DIFFERENTIATION

OVERALL COST LEADERSHIP

Particular Segment only

FOCUS

STRATEGIC ADVANTAGE

Skill sets required
Overall Cost Leadership • Sustained capital investment • Process engineering skills • Ease of manufacture • Low cost distributing system • Structured organization • Incentives based on meeting quantitative targets Differentiation • Strong R&D/marketing abilities • Product engineering • Reputation for quality/technological prowess • Strong co‐ordination among functions • Subjective measures of incentives

Struck in the middle

Return on Investment

debasis.mallik@gmail.com

Market Share

Matching Dell

Michael Porter’s contribution‐ A synthesis Quantify Run regression
• Definition of an extended industry‐ competition and rivalry • Industry is not homogeneous‐ strategic group • Value chain analysis • SCP Analysis the five forces Dynamic to find beta co‐ efficients Find the critical dimensions Run cluster analysis Run F‐stat to find if mobility barriers exist Run F test to see if these changes over time Run F test Find which beta is more important

Mobility barriers

Critical Activities More important‐ structure or conduct

Worst business decisions of all times Rank
• Ross Perot passes on Microsoft for cheap ($ 50M, 1979) • Excite passes on Google for $750,000 (1999) • Edwin Drake fails to patent his oil drill (1858) • Ever‐popular Coke introduces a new formula (1985)
1

3

4

7

Value Chain Analysis
Activities Marketing & Sales Operations Distinctive Aspects Direct sales Large outside sales force Online ordering PCs manufactured to order Installation of standard and proprietary software PCs shipped directly to customers Though www.dell.com Third party on‐site visits Comments Permits direct contact with customers No finished goods inventory Low WIP/ raw materials Fits with knowledgeable customer base Fits with stable product line (no

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