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Situational Analysis

Situational Analysis:

Process of finding a strategic fitbetween external opportunities andinternal strengths while working aroundexternal threats and internal

weaknesses.

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TOWS Matrix

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Resource-Based Approach

Resource:

An asset, competency, process, skill,or knowledge controlled by the

corporation.

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Competitive Strategy

Industry Structure:

Fragmented Industry Many small and medium-sized local

companies compete for small shares of totalmarket

Focus strategies predominate

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Competitive Strategy

Industry Structure:

Consolidated industry Mature industry dominated by a few large

companies

Cost Leadership or Differentiation predominate

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Dimensions of Quality

Quality

Performance

Features

Reliability Conformance

Durability

Serviceability

Aesthetics

Perceived Quality

Dimensions

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Competitive Strategy

Strategic rollup:Quickly consolidate fragmented

industry

Money from venture capitalEntrepreneur acquires hundreds of

owner-operated firms

Creates large firm with economies ofscale

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Competitive Strategy

Strategic rollup:

Differ from Conventional M&As Large number of firms

Owner-operated firms

Goal to reinvent entire industry

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Competitive Tactics

Tactic:

Specific operating plan detailing how a

strategy is to be implemented in termsof when and where it is to be put intoaction. Timing tactics

Market location tactics

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Competitive Tactics

Timing Tactics:

First mover (pioneer) Reputation as industry leader

High profits

Sets standards for subsequent products inthe industry

Late mover Able to imitate technological advances

of others Keeps R&D costs down

Keeps risks down

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Competitive Tactics

Market Location Tactics:

Offensive Tactics

Frontal assault

Flanking maneuver

Bypass attack

Encirclement

Guerrilla warfare

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Competitive Tactics

Market Location Tactics:

Defensive Tactics Raise structural barriers

Increase expected retaliation

Lower the inducement for attack

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Cooperative Strategies

Cooperative Strategies:

Collusion

Active cooperation of firms to reduceoutput and raise prices

Explicit

Tacit

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Cooperative Strategies

Cooperative Strategies:

Strategic Alliance: Partnership of two or more corporations or

business units to achieve strategicallysignificant objectives that are mutuallybeneficial.

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Cooperative Strategies

StrategicAlliance

Access to markets

Achieve competitive

advantage

Obtain technology

Reduce financial risk

Reduce political risk