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Forces that Shape our Company Strategy

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Page 1: Forces that Shape our Company Strategy

The Forces that Shape Company Strategy

Page 2: Forces that Shape our Company Strategy

• You know that to sustain long-term

Success and Profitability you must

respond strategically to competition

• You need to be aware of all the

elements that are affecting the:

– Market,

– The Production Line and

– Customers.

Forces that Shape StrategyIntroduction

Page 3: Forces that Shape our Company Strategy

• According to Porter, there are 04

competitive forces that can harm our

company success:

– Savvy Customers,

– Powerful Suppliers,

– Aspiring Entrants and

– Substitute Offerings.

Forces that Shape Strategy Introduction

Page 4: Forces that Shape our Company Strategy

• Definition of Savvy Customer:

– Well informed and perceptive

Customer.

• Savvy customers can force

down prices by playing you

and your rivals against one

another.

Forces that Shape Strategy Competitive Forces – Savvy Customers

Page 5: Forces that Shape our Company Strategy

• Definition of Supplier:

– Someone whose business is to

supply a particular service or

commodity

• Powerful suppliers may

constrain your profits if they

charge higher prices.

Forces that Shape Strategy Competitive Forces – Powerful Suppliers

Page 6: Forces that Shape our Company Strategy

• Definition of Aspiring:

– To have a great ambition or ultimate

goal; desire strongly

• Definition of Entrants:

– One that enters, especially one that

enters a competition.

• They are armed with new capacity

and hungry for market share.

Forces that Shape Strategy Competitive Forces – Aspiring Entrants

Page 7: Forces that Shape our Company Strategy

• New products and services can

lure customers away with new:

– Opportunities,

– Benefits,

– Advantages,

– Low Price,

– Feeling of well-being,

– Illusions.

Forces that Shape Strategy Competitive Forces – Substitute Offerings

Page 8: Forces that Shape our Company Strategy

Forces that Shape Strategy Ways to deal and overcome the Forces

• We need to reshape

the forces in our favor,

based on new tactics to

reduce the impact of

profit leaking.

Page 9: Forces that Shape our Company Strategy

Forces that Shape Strategy Ways to deal with the Forces

Main Goal Action

Neutralize the

Supplier Power

Standardize specifications for parts so your company

can switch more easily among

vendors.

Page 10: Forces that Shape our Company Strategy

Forces that Shape Strategy Ways to deal with the Forces

Main Goal Action

To counter customer power

Expand your services so it’s harder for

customers to leave you for a rival.

Main Goal Action

To temper price wars initiated by established

rivals

Invest more heavily in products that

differ significantly from competitors’ offerings.

Page 11: Forces that Shape our Company Strategy

Forces that Shape Strategy Ways to deal with the Forces

Main Goal Action

To scare off newentrants

Elevate the fixed costs of competing; for instance, by escalating your R&D

expenditures.

Main Goal Action

To limit the threat of substitutes

Offer better value through

wider product accessibility.

Page 12: Forces that Shape our Company Strategy

Author Roberto Lico Jr.

[email protected]@hotmail.com

Linkedin: http://goo.gl/UgCKETwitter: @licoreis