1. COUNTRY INDUSTRY ANALYSIS ? Operating leverageFinancial leverage

2. Embryonic GrowingShakeoutMatureDecline Stage adopters /: : / / / .G Johnson, K Scholes and R Whittington, Exploring Corporate Strategy, 7th Edition, Pearson, 2005, p86 3. /INDUSTRY LIFE CYCLEIndustry Sales Introduction Growth Maturity DeclineTime : 4. /PRODUCT ANDPROCESS INNOVATION OVER TIME Product Innovation Process InnovationRate of innovationTime 5. /PRODUCT, PROCESS, AND STRATEGIC INNOVATION OVER THE LIFE CYCLEProductinnovation RATE OF INNOVATION Strategic innovationProcessinnovation TIME 6. THE DEMAND-LED CAPABILITY LIFE CYCLE Source: Adapted from Walters (2002) 9 7. STRATEGY : MARKET-INDUSTRY SYMMETRYCustomer &Industry Benefits StructureMarketSegment, Size Competitive IndustryChannelsSpace PerceptualCompetitive SpaceDynamics Value StrategicProposition Positioning 11 8. Technological Trends Player Mapping AnalysisCompetition TrendsEconomic & Life Cycle AnalysisIndustry & Alliance Demographic TrendsBattle AnalysisEvolution Analyses Correlation AnalysisTrajectory Mapping Analysis4-Arenas Analysis Demographic Analysis Strategic InflectionPoint Analysis /ComplementorInternational Trends Political & Socio-Cultural Trends Integration- Responsiveness GridPlayer Mapping AnalysisAnalysisIssue Mapping Analysis International EvolutionIssue Saliency AnalysisAnalysis 9. . Competitive AnalysisCOMPETITION IndustryCompetitiveCompetitiveStrategic Structure Space DynamicsPositionINDUSTRY POSITION Define Understand AddressDevelop Segment, Size, Perceptual Value CustomerChannel Space Proposition What &Who WhereHowHow Much13 10. INDUSTRY ENVIRONMENT /COMPETITIVE SPACEHow?(Technology)ho?) W rs me(Custo What?(Products/Services) 11. / COMPETITIVE ENVIRONMENT Complementor Porters Five Forces 12. Interrm: Interfirm Rivalry: Competitive Awareness Market Types MotivationSlow, Standard CapabilityLikelihood of Attack Relative Sizeor Fast CycleFirst Mover Incentives SpeedCompetitive Likelihood of ResponseInnovation Outcomes QualitySustainedType of Competitive Competitive ActionAdvantageActors ReputationTemporaryDependence on the AdvantageMarket MarketCommonality Resource Availability EvolutionaryOutcomesResourceSimilarity Entrepreneurial Growth-Oriented Feedbackor Market-Power18Ref.: Chen, 1996Actions 13. ValueNet PhasePARTS frameworkHypercompetition Phase C-Q/T-K/S/D frameworkThe PLC Phase PLCSWOT framework 14. HYPERCOMPETITIONDAveni Price/ Perceived Quality / Know-how first follower (lowers risk)/Potential for Vertical Integration 15. A 4 ARENA ANALYSISArenaKey Success Factors toolCost / Quality Understanding customer Cost leadership vs needs differentiationCost reduction Know-how / TimingFoster innovation First mover advantages Quick market vs fast-followerpenetration advantages Experience Curve Stronghold creation /DeterrenceBarriers to Entry invasion Aggression Knowledge, capitalbarriers, etc (often built with timing & know- how),Patents & otherlegal walls.Distributionagreements or patterns. The competitive landscape.Deep pockets Brute forceBrawn often overcomes Out-maneuvering bigposition and brains andopponentsspeed. 16. Profit Pools 17. HYPOTHETICAL PROFIT POOL OF THE FOOD DELIVERY SYSTEM 18. PROFIT POOL:25% 20 15 operating margin1050 auto loans gasoline 100% 0 new car dealersused car dealersleasingauto insurance service repair warrantyauto rental auto manufacturingShare of Industry Revenueaftermarket parts 24source: Gadiesh and Gilbert, Harvard Business Review, May-June 1998 19. /barriers to mobility marginaltenuous /Thinking through the implications of each industry trend for the strategic group as a whole 20. /barriers to mobility marginaltenuous /Thinking through the implications of each industry trend for the strategic group as a whole 21. Adapted from Exhibit 2.8 The World Automobile Industry: Strategic Groups 22. Broad "" Ryanair Extent of Route System easyJet relative market share GoVirginKLMuk ? A lucrative Express strategic space? Air One Buzz /mainstream carriers Narrow /budget carriers BasicMany Added ? Services 23. STRATEGIC GROUP MAPPING ANALYSIS 24. QUESTIONS & ANSWERS 25. ASSIGNMENT