Chapter 7 - PPT 7 SWOT Analysis and Porters Model

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    Lecture 2 SWOT Analysis &Lecture 2 SWOT Analysis &

    Porters Five Forces ModelPorters Five Forces Model

    Steve MontgomerySteve Montgomery

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    StrateyStratey

    Overview of competitive strategy: What are the high level goalsOverview of competitive strategy: What are the high level goals

    of any company?of any company?

    DifferentiationDifferentiationandandpricing powerpricing power

    SurvivalSurvivalandandprofitabilityprofitability

    Porters Five Forces ModelPorters Five Forces Model

    How to assess the landscape of your maretHow to assess the landscape of your maret

    !!"lue Ocean# Strategy$"lue Ocean# Strategy$

    % toolit to identify areas to e&plore ' creating a competition(free )one% toolit to identify areas to e&plore ' creating a competition(free )one

    to reach the a*ove o*+ectivesto reach the a*ove o*+ectives

    $,im- W./. and Mau*orgne- 0.- 1223-$,im- W./. and Mau*orgne- 0.- 1223-Blue Ocean Strategy How To Create Uncontested Market Space and Make te Co!petition "rrelevantBlue Ocean Strategy How To Create Uncontested Market Space and Make te Co!petition "rrelevant--

    H"S Press. 4Well also *e using their H"0 articles for *revity5H"S Press. 4Well also *e using their H"0 articles for *revity5

    6nd goal:6nd goal:Understanding your business allows you toUnderstanding your business allows you to

    pick smart projectspick smart projects

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    Lecture 2! SWOT & Porters " ForcesLecture 2! SWOT & Porters " Forces

    ModelModel

    "usiness strategy overview:"usiness strategy overview: Strengths- weanesses- opportunities 7 threats 4SWO85Strengths- weanesses- opportunities 7 threats 4SWO85

    Porters five forces modelPorters five forces model

    /lass discussion: Microsofts maret position and future/lass discussion: Microsofts maret position and future

    options9opportunities 4freeform SWO8 analysis application of Porters5options9opportunities 4freeform SWO8 analysis application of Porters5

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    #ntroduction To SWOT#ntroduction To SWOT

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    SWOT Analysis! T$in%in StrateicallySWOT Analysis! T$in%in Strateically

    SStrengthstrengths What aspects of a firm are its strengths?What aspects of a firm are its strengths?

    /an *e structural- maret *ased- ;P- etc./an *e structural- maret *ased- ;P- etc.

    What gives a firm its competitive advantages?What gives a firm its competitive advantages?

    WWeanesseseanesses

    What aspects of a firm are wea?What aspects of a firm are wea?

    /an *e structural- legal- maret *ased- etc./an *e structural- legal- maret *ased- etc.

    What hinders a firm from competing well?What hinders a firm from competing well?

    OOpportunitiespportunities

    What areas9marets are there that a firm can grow into?What areas9marets are there that a firm can grow into?

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    SWOT ScorecardSWOT ScorecardStrengths:

    Threats:Threats:

    Weaknesses: Opportunities:

    Opportunities:

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    Steves Orani(ation! An A))lied StrateySteves Orani(ation! An A))lied Stratey

    *Steves +oss,*Steves +oss,33

    #/O -uy#/O -uy

    *Steves +oss,*Steves +oss,22

    #/O -uy#/O -uy

    Steves +ossSteves +oss

    #/O -uy#/O -uy

    +i -rou)+i -rou)

    #n Mass#n Mass

    1. #/O uys1. #/O uys

    +o0s Tea+o0s Tea

    in Oreonin Oreon

    12 #/O -uys12 #/O -uys

    Sta Arc$ 1Sta Arc$ 1

    *eeds $el),*eeds $el),

    Steves TeaSteves Tea

    in WAin WA

    4 Po5er4 Po5er

    6ircuit -uys6ircuit -uys

    Sta Arc$ 2Sta Arc$ 2

    *Straddlin*Straddlin

    Fence,Fence,

    Sta Arc$ 3Sta Arc$ 3

    *Out o Favor,*Out o Favor,

    7is Tea in S67is Tea in S6

    ' #/O 6$i) -uys' #/O 6$i) -uys

    Sta Arc$ 48Sta Arc$ 48

    Wants to Wor%Wants to Wor%

    on SO6son SO6s

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    Soe +ac%round!Soe +ac%round!

    Steves team: =ust coming off a successful pro+ect. >22 functional on >Steves team: =ust coming off a successful pro+ect. >22 functional on > stst

    design spin. Product team decided not to do it.design spin. Product team decided not to do it.

    Steves 0oss! :;ou need to )ut t$at 0e$ind you< Wor% on t$is ot$erSteves 0oss! :;ou need to )ut t$at 0e$ind you< Wor% on t$is ot$er

    stu

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    T$e 6ast o 6$aractersT$e 6ast o 6$aracters

    8he staff: @ears and years of doing ;9O8he staff: @ears and years of doing ;9O *?S+ and P6#e*?S+ and P6#e

    invented $ere,invented $ere,

    "ig team: Has a culture of !; win- you lose#. ;s at a remote site that is"ig team: Has a culture of !; win- you lose#. ;s at a remote site that is

    out of the mainstreamout of the mainstream

    =ims team:

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    W$at S$ould Steve @oW$at S$ould Steve @o

    So how should this *e handled?So how should this *e handled? Some topics of leading technical people in the ne&t class in the programCSome topics of leading technical people in the ne&t class in the programC

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    SWOT Scorecard! Steves TeaSWOT Scorecard! Steves TeaStrengths:

    Best silicon guys, understand it

    better than anyone in org.

    Understand relationship building

    Team very cross-trained

    Flexible, independent, respond well

    to ambiguity and uncertainty

    Threats:Threats:

    Big Group would love to minimizeBig Group would love to minimize

    Steves teamSteves team

    Steves Boss (es) looking to lay low,Steves Boss (es) looking to lay low,

    not take any risks (might cutnot take any risks (might cut

    headcount who needs a team of 4-headcount who needs a team of 4-

    5?)5?)

    Team hates new work, might quitTeam hates new work, might quitWeaknesses:

    Angry and upset about product snub

    Perceived as junior power delivery

    guys & politically unpopular with

    bossesMain staff advocate going away

    Trying to play new game for first

    time, going against veterans

    No lab, so no motivation to spend

    money in WAOld network doesnt apply here

    Opportunities:Opportunities:

    Big Group on East Coast, far fromBig Group on East Coast, far from

    action. Doesnt work well with others.action. Doesnt work well with others.

    Also doesnt own anything (but thinksAlso doesnt own anything (but thinks

    it does).it does).

    Staff Arch 1 owns lots of stuff andStaff Arch 1 owns lots of stuff and

    needs help badly. Has boss ear.needs help badly. Has boss ear.

    Bobs team has limited expertise butBobs team has limited expertise but

    a great lab. Also has boss ear.a great lab. Also has boss ear.

    Staff Arch 4 knows about growthStaff Arch 4 knows about growth

    areaarea

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    SWOTSWOT

    /an *e applied at all levels '/an *e applied at all levels ' @our career@our career

    @our team@our team

    @our *usiness@our *usiness

    @our industry@our industry

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    Fir BCa)le! Autoo0ilesFir BCa)le! Autoo0iles

    Duestion: How can the new EM compete against 8oyota- Ford- et al. post(Duestion: How can the new EM compete against 8oyota- Ford- et al. post(*ailout?*ailout?

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    SWOT Scorecard! T$e e5 -MSWOT Scorecard! T$e e5 -MStrengths:

    Partially owned by taxpayers and the

    govt

    More nimble than before

    Starting to build some better vehicles

    Have a jump on electric vehicles, flex fuel

    Still have strong brand recognition

    Threats:Threats:

    Backlash against bailoutsBacklash against bailouts

    Perception of weak qualityPerception of weak quality

    Strong product offerings from competitorsStrong product offerings from competitors

    Brand damaged by bankruptcyBrand damaged by bankruptcy

    Culture not really understanding of issuesCulture not really understanding of issues

    (same people still running the show)(same people still running the show)

    Weaknesses:

    Partially owned by the taxpayers and the

    govt

    Union owns significant % of company

    Badly damaged brand image andreputation for poor quality

    Operations damaged by restructuring

    (have to take time to do this right)

    Opportunities:Opportunities:

    Can load unproductive divisions/assetsCan load unproductive divisions/assets

    into liquidation company and unloadinto liquidation company and unload

    Can use gov.t ties to influence flex fuelCan use gov.t ties to influence flex fuel

    regulations, EPA standards, etc. to getregulations, EPA standards, etc. to get

    aheadahead

    Can launch new ad blitz to re-introduceCan launch new ad blitz to re-introduce

    themselvesthemselves

    Can re-boot dealer networkCan re-boot dealer network

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    W$at S$ould -M @oW$at S$ould -M @o

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    One O)inion!One O)inion!

    More mareting dollars to /hevy:More mareting dollars to /hevy: /hevy has near >22 *rand/hevy has near >22 *rand

    recognition ' very hard to achieve 'recognition ' very hard to achieve '

    capitali)ecapitali)e

    /hevy G2 of EMs sales/hevy G2 of EMs sales

    > of EMs AA models> of EMs AA models Spread offerings around all maretSpread offerings around all maret

    segmentssegments

    Mae "uic- /adillac- EM/ nicheMae "uic- /adillac- EM/ niche

    *rands*rands

    /hevy has near >22 *rand/hevy has near >22 *randrecognition ' very hard to achieverecognition ' very hard to achieve

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    Anot$er O)inion!Anot$er O)inion!

    "anruptcy and"anruptcy andrestructuring couldrestructuring could

    tae yearstae years

    "uild politically"uild politically

    unpopular carsunpopular cars

    Still have too muchStill have too much

    capacity andcapacity and

    restrictive la*orrestrictive la*oragreementsagreements

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    SWOT SuarySWOT Suary

    ;s a good techniIue to get the strategy discussion;s a good techniIue to get the strategy discussiongoinggoing' puts a lot of high(level information in conte&t' puts a lot of high(level information in conte&t

    Jse it to assess situations and thin more deeply a*outJse it to assess situations and thin more deeply a*out

    tactical movestactical moves

    ;f the SWO8 picture loos really misaligned with the;f the SWO8 picture loos really misaligned with the

    maret9your firm- can tell you that your overallmaret9your firm- can tell you that your overall

    strategy should *e reassessedstrategy should *e reassessed

    ;s only as good as the thining that went into it;s only as good as the thining that went into it

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    Porters Five Forces ModelPorters Five Forces Model Five Forces Model: % framewor for shaping competitive strategyFive Forces Model: % framewor for shaping competitive strategy

    Kie SWO8- gives a repeata*le set of criteria to +udge a situation *yKie SWO8- gives a repeata*le set of criteria to +udge a situation *y

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    -oal o Any +usiness -oal o Any +usiness

    ;dentify e&ternal threats and undue influence;dentify e&ternal threats and undue influence Ma&imi)e own influenceMa&imi)e own influence

    Minimi)e negative influencesMinimi)e negative influences

    /reate differentiation/reate differentiation

    "y ma&imi)ing9minimi)ing influence- and creating differentiation you get"y ma&imi)ing9minimi)ing influence- and creating differentiation you getpricing power 4assuming there is a maret5pricing power 4assuming there is a maret5

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    T$reat O e5 BntrantsT$reat O e5 Bntrants

    %,%- !"arriers to 6ntry#%,%- !"arriers to 6ntry# 6ssentially: How hard is it for other firms to enter your6ssentially: How hard is it for other firms to enter your

    *usiness?*usiness?

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    +arriers to Bntry D BCa)les+arriers to Bntry D BCa)les

    Microprocessors: Karge capital reIuired to *uild a fa*Microprocessors: Karge capital reIuired to *uild a fa*

    LO8 true anymoreCLO8 true anymoreC

    More companies going fa*less- more Iuality competition from foundriesMore companies going fa*less- more Iuality competition from foundries

    Pharmaceuticals: F

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    +arriers to Bntry cont

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    +arriers to Bntry8 cont

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    Po5er O Su))liersPo5er O Su))liers

    Put simply: How much influence do suppliers have over your *usiness?Put simply: How much influence do suppliers have over your *usiness? %re you dependent on a component to succeed?%re you dependent on a component to succeed?

    %re people *uying your product *ecause it contains & or y from another%re people *uying your product *ecause it contains & or y from another

    supplier?supplier?

    %re there high switching costs to use another firm?%re there high switching costs to use another firm?

    %re there any su*stitutes?%re there any su*stitutes?

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    Po5er O Su))liers D BCa)lesPo5er O Su))liers D BCa)les

    4High power e&ample54High power e&ample5 P/ "usiness: ;ntel

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    Po5er O +uyersPo5er O +uyers

    Flip side of supplier powerFlip side of supplier power Put simply: How much influence do *uyers9customers havePut simply: How much influence do *uyers9customers have

    over your *usiness?over your *usiness?

    %re you a commodity? 4/ustomers can get what you have from%re you a commodity? 4/ustomers can get what you have from

    anywhere5anywhere5

    or 1 *uyers for the ma+ority of your *usiness?

    %re you developing a standard product?%re you developing a standard product?

    Kow switching costs to go to something else?Kow switching costs to go to something else?

    /an your *uyer threaten to produce your product themselves?/an your *uyer threaten to produce your product themselves?

    Where are the end(users eye*alls?Where are the end(users eye*alls?

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    Po5er o +uyers D BCa)lesPo5er o +uyers D BCa)les

    P/ Memory vendors ' Prices set on open maret-P/ Memory vendors ' Prices set on open maret-designs driven *y =6

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    T$reat O Su0stitutesT$reat O Su0stitutes

    Put simply: ;s there something else out there similar toPut simply: ;s there something else out there similar to

    your product thats !Eood 6nough#?your product thats !Eood 6nough#? ;nterwoven with power of *uyers9suppliers;nterwoven with power of *uyers9suppliers

    Jndifferentiated products never earn high profits ' maretJndifferentiated products never earn high profits ' maret

    mechanisms 4supply and demand5 tae overmechanisms 4supply and demand5 tae over

    When there is an accepta*le su*stitute out there- you willWhen there is an accepta*le su*stitute out there- you will

    reIuire another edge 4mareting- *randing- regulatory edge-reIuire another edge 4mareting- *randing- regulatory edge-

    etc.5etc.5

    Lew technologies can mae products o*soleteLew technologies can mae products o*solete

    Sometimes economic conditions come into play-Sometimes economic conditions come into play-

    maing other su*stitutes more attractivemaing other su*stitutes more attractive

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    T$reat O Su0stitutes D BCa)lesT$reat O Su0stitutes D BCa)les

    Kand lines vs. cell phonesKand lines vs. cell phones

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    Eivalry Aon 6o)etitorsEivalry Aon 6o)etitors

    8he more energy you put into fighting off competition- the less you have for8he more energy you put into fighting off competition- the less you have for

    profita*ilityprofita*ility Potential for price wars 4everyone loses5 ' su*+ect of game theoryPotential for price wars 4everyone loses5 ' su*+ect of game theory

    ;ncreased e&penditures for mareting- ads- etc.;ncreased e&penditures for mareting- ads- etc.

    ;ntensity increases where there are:;ntensity increases where there are:

    Mature- slow growth industries 4 pie is fi&ed5Mature- slow growth industries 4 pie is fi&ed5

    Participants en+oy roughly same amount of powerParticipants en+oy roughly same amount of power

    Products and services are indistinguisha*leProducts and services are indistinguisha*le

    Fi&ed costs are high- marginal costs lowFi&ed costs are high- marginal costs low

    0ivalry can *e good for all:0ivalry can *e good for all:

    For average consumer- competition tends to lower prices and drive new offeringsFor average consumer- competition tends to lower prices and drive new offerings

    to maretto maret

    For ar%et )artici)ants8 co)etition leads to 0etter )roducts and )roita0leFor ar%et )artici)ants8 co)etition leads to 0etter )roducts and )roita0le

    ar%et seentation *+lue Ocean Stratey odule Toyota eCa)le,ar%et seentation *+lue Ocean Stratey odule Toyota eCa)le,

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    Eivalry D BCa)lesEivalry D BCa)les

    %irlines:%irlines:

    Fare cuts and price wars are commonFare cuts and price wars are common

    /ell phones:/ell phones:

    Warring rate plans and feature offeringsWarring rate plans and feature offerings

    "oeing9%ir*us"oeing9%ir*us

    ;ntel9%M

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    Eivalry D BCa)lesEivalry D BCa)les

    Steves friend Sean in grad school:Steves friend Sean in grad school:

    6very 1 months- would get a call from a long distance phone provider6very 1 months- would get a call from a long distance phone provider

    !!Hi- this is (((( from Sprint and we have a deal for youC Would you *e willingHi- this is (((( from Sprint and we have a deal for youC Would you *e willing

    to switch your long distance service?#to switch your long distance service?#

    Sean:Sean: #Sure$ %at are you offering&'#Sure$ %at are you offering&'

    8he ne&t month- hed get a call from %878 asing why he left8he ne&t month- hed get a call from %878 asing why he left

    Leedless to say- Sean was a nightmare customerLeedless to say- Sean was a nightmare customer

    He wheedled *etter and *etter deals out of all of his suitors every other monthHe wheedled *etter and *etter deals out of all of his suitors every other month

    %lso had a way to get !free# electronics from 8arget%lso had a way to get !free# electronics from 8arget

    6&ample of rivalry leading to *etter deal for end user.6&ample of rivalry leading to *etter deal for end user. OfOf

    course- in the end- no phone company ever made any money offcourse- in the end- no phone company ever made any money offof Seanof Sean..

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    Five Forces SuaryFive Forces Suary

    ;s a good;s a goodgenericgenericframeworU is as detailed as you mae itframeworU is as detailed as you mae it

    /urious treatment of the government ' should there *e a /urious treatment of the government ' should there *e a ththforce?force? /omplementary products can mae or *rea an offering '/omplementary products can mae or *rea an offering '

    iPod e&ampleiPod e&ample

    /ars are pretty useless without roads or gas stations/ars are pretty useless without roads or gas stations

    %irlines irrelevant without airports%irlines irrelevant without airports

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    o5 T$ese Tools Eelate To ;ouo5 T$ese Tools Eelate To ;ou

    Jsing SWO8 and Five Forces in tandem allows you to:Jsing SWO8 and Five Forces in tandem allows you to:

    ;dentify the strategic environment;dentify the strategic environment

    Mae an assessment of your strength relative to other playersMae an assessment of your strength relative to other players

    ;f youre thorough in gathering information and disciplined in its;f youre thorough in gathering information and disciplined in its

    presentation- the right answer can leap off the pagepresentation- the right answer can leap off the page

    %pply these tools to:%pply these tools to: @our company@our company

    @our *usiness unit@our *usiness unit

    @our organi)ation@our organi)ation

    @our team@our team @ou@ou

    Strategy is a mindsetStrategy is a mindset

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    6lass @iscussion! Microsot vs< -oole6lass @iscussion! Microsot vs< -oole

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    #ntro And T$e Players#ntro And T$e Players

    Who are the players?Who are the players? Whats MSF8s motivation in pursuing search?Whats MSF8s motivation in pursuing search?

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    6ase Guestions6ase Guestions

    Duestions to ponder for the MSF8 case:Duestions to ponder for the MSF8 case: Whats MSF8s motivation in pursuing search?Whats MSF8s motivation in pursuing search?

    Has Marc %ndressons vision come true? How does this relate to EooglesHas Marc %ndressons vision come true? How does this relate to Eoogles

    overall strategy 4you may need to Eoogle Eoogles strategy if youre not familiaroverall strategy 4you may need to Eoogle Eoogles strategy if youre not familiar

    already.5? Have Eates fears come true?already.5? Have Eates fears come true?

    How has MSF8 fared historically in its strategic moves?How has MSF8 fared historically in its strategic moves?

    What ey insight a*out the search maret did @ahooC overloo and EoogleWhat ey insight a*out the search maret did @ahooC overloo and Eoogle

    e&ploit?e&ploit?

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    SWOT Scorecard D MSFTSWOT Scorecard D MSFTStrengths: Threats:Threats:

    Weaknesses: Opportunities:Opportunities:

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    SWOT Scorecard D -OO-SWOT Scorecard D -OO-Strengths: Threats:Threats:

    Weaknesses: Opportunities:Opportunities:

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    Steves SWOT Scorecard! MSFTSteves SWOT Scorecard! MSFT

    Strengths:

    LOTS of cash. Can buy technology or

    companies if they need to

    Own the worlds most popular OS,

    browser and have >>> hardware

    experience than rivals

    #1 browser

    Are excellent strategists (Linux)

    Has extensive partner network w/MSN,

    Netflix, etc.

    Threats:Threats:

    Googles domination of searchGoogles domination of search

    Apple has the cool factor and is harmingApple has the cool factor and is harming

    MSFTs brand with adsMSFTs brand with ads

    Caught looking the wrong way WRTCaught looking the wrong way WRT

    mobile devices - biz model compromisedmobile devices - biz model compromised

    Weaknesses:

    #3 in search

    Considered to be Big Brother

    Has run afoul of regulatory agenciesbefore

    Profitability depends on OS, Office sales

    market trending away from these (and

    toward GOOGs model)

    Opportunities:Opportunities:

    Can still buy Yahoo! Or Facebook.Can still buy Yahoo! Or Facebook.

    IE is the internet portal of choice canIE is the internet portal of choice can

    interlink Bing into code and minimizeinterlink Bing into code and minimizeGOOG have enough infrastructure toGOOG have enough infrastructure to

    negate GOOGsnegate GOOGs

    Can adopt new usage model and beatCan adopt new usage model and beat

    GOOG to online app gameGOOG to online app game

    Can intertwine Bing with Xbox, MSN, etc.Can intertwine Bing with Xbox, MSN, etc.

    sites & partners have an existing networksites & partners have an existing networkalreadyalready

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    Steves SWOT Scorecard! -ooleSteves SWOT Scorecard! -oole

    Strengths:

    Invented the best search algorithm

    Is considered the it company for the

    internet

    Quirky culture drives lots of

    innovation

    High stock price = ready access to

    capital

    Threats:Threats:

    MSFT has cash and a will to winMSFT has cash and a will to win

    GOOGs phone overshadowed byGOOGs phone overshadowed by

    iPhoneiPhone

    No real hardware expertise; willNo real hardware expertise; will

    need help from INTCneed help from INTC

    Apple owns content, OS, devicesApple owns content, OS, devices

    Weaknesses:

    Main product dependent on

    connection speed

    Security and privacy concerns

    among users

    Main source of content (YouTube) is

    constant focus of legal action rivals

    have much more and better content

    Opportunities:Opportunities:

    Can try to influence new regulatoryCan try to influence new regulatory

    structure (Net Neutrality)structure (Net Neutrality)

    Market trend is towards mobileMarket trend is towards mobile

    devices, supporting cloud computingdevices, supporting cloud computingtheorytheory

    Can draw on MSFTs unpopularityCan draw on MSFTs unpopularity

    Can cut into MSFTs profits byCan cut into MSFTs profits by

    launching more net appslaunching more net apps

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    Porters Five Forces Model! Searc$Porters Five Forces Model! Searc$

    8hreat of new entrants?8hreat of new entrants? "argaining power of *uyers?"argaining power of *uyers?

    8hreat of su*stitutes?8hreat of su*stitutes?

    "argaining power of suppliers?"argaining power of suppliers?

    0ivalry?0ivalry?

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    MSFTs Bntry #nto Searc$! SoeMSFTs Bntry #nto Searc$! Soe

    6oents6oents

    Eoogles overall strategy N Mae the internet the new P/Eoogles overall strategy N Mae the internet the new P/ 0educe the P/ to a old(style terminal 4Ereen screen *o& hooed to a0educe the P/ to a old(style terminal 4Ereen screen *o& hooed to a

    mainframe5mainframe5

    6liminate the need for local OS 4operating system5 or apps ' put them all on the6liminate the need for local OS 4operating system5 or apps ' put them all on the

    we*. Offer net storage of data to eliminate need for local hard drives- etc.we*. Offer net storage of data to eliminate need for local hard drives- etc.

    Ma&imi)e eye*alls to Eoogles search engine and ad machines- which could thenMa&imi)e eye*alls to Eoogles search engine and ad machines- which could then

    custom(tailor ad views to your contentcustom(tailor ad views to your content

    Willing to influence government to set regulations *eneficial to EoogleWilling to influence government to set regulations *eneficial to Eoogle

    MSF8s revenue in this scenario is compromised severelyMSF8s revenue in this scenario is compromised severely

    P/ and OS com*ination would lose relevance ' no need for local performance orP/ and OS com*ination would lose relevance ' no need for local performance or

    storage ' *ig cash cow for MSF8storage ' *ig cash cow for MSF8

    MSF8 needs to rethin its *usiness model somewhat to encompass mo*ileMSF8 needs to rethin its *usiness model somewhat to encompass mo*ile

    devices ' old model of high OS is threatened *y cheap net*oos 7devices ' old model of high OS is threatened *y cheap net*oos 7

    smartphonessmartphones

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    MSFTs Bntry #nto Searc$8 cont

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    One O)inionOne O)inion

    0emem*er: Firms0emem*er: Firmsrespond to incentivesrespond to incentives

    Why shouldntWhy shouldnt

    Eoogle want toEoogle want to

    e&ploit the rules?e&ploit the rules?

    Eoogle recently hiredEoogle recently hiredSen.

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    Stratey Ta%ea5aysStratey Ta%ea5ays

    Sometimes the competition isnt o*viousSometimes the competition isnt o*vious Pay attention to what people say andPay attention to what people say and moremoreattention to whatattention to what

    people dopeople do

    ;ncentives matterC;ncentives matterC

    When youre profita*le- others will attempt to tae it away.When youre profita*le- others will attempt to tae it away. LoLo*usiness model is permanent*usiness model ispermanent

    8herefore- always loo to defend your a*ility to differentiate8herefore- always loo to defend your a*ility to differentiate

    Sometimes- it will mean throwing your strength against others. FindSometimes- it will mean throwing your strength against others. Find

    ways to leverage yours in une&pected waysways to leverage yours in une&pected ways

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    For eCt Tie!For eCt Tie!

    "lue Ocean Strategy"lue Ocean Strategy

    0ead:0ead:

    ,im and Mau*ornge- !"lue Ocean Strategy#,im and Mau*ornge- !"lue Ocean Strategy#

    46ither the paper or the *oo. @oull get more out of the *oo546ither the paper or the *oo. @oull get more out of the *oo5

    %t the end of the session- youll receive your first HW assignment 4and most%t the end of the session- youll receive your first HW assignment 4and most

    important5important5