Chapter1 BUS 4998-01 SP 2016

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~–1Copyright © 2014 by Glo-Bus Software, I!"

© Copyright 2014 by Arthur A. Thompson. All rights reserved. Not for distribution.© Copyright 2014 by Arthur A. Thompson. All rights reserved. Not for distribution.Published and distributed by !"ra# $ill %du!ation& 'urr (idge& )llinoisPublished and distributed by !"ra# $ill %du!ation& 'urr (idge& )llinois Presentation *esignPresentation *esign

by Charlie Coo+by Charlie Coo+

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Copyright © 2014 by Glo-Bus Software, I!" 0–2

“ “ Strategy means making Strategy means making clear-cut choices about clear-cut choices about

how to compete.” how to compete.”

#a!$ %el!h#a!$ %el!h

&or'er C(), Geeral (le!tri!&or'er C(), Geeral (le!tri!

“ “ Without a strategy the organization is likeWithout a strategy the organization is like

a ship without a rudder.” a ship without a rudder.” Joel Ross andJoel Ross andMichael KamiMichael Kami

Authors and ConsultantsAuthors and Consultants

“ “ If your firm’s strategy can beIf your firm’s strategy can beapplied to any other firm youapplied to any other firm you

don’t ha!e a !ery good one.” don’t ha!e a !ery good one.” *a+i #" Collis a i!hael G" .u$sta*a+i #" Collis a i!hael G" .u$sta

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Core Co!ept/ StrategyCore Co!ept/ Strategy

A firm,s strategy strategy !onsists of the !ompetitive

moves and business approa!hes that managers

employ to attra!t and please !ustomers& !ompete

su!!essfully& !apitali-e on opportunities to gro#the business& respond to !hanging mar+et

!onditions& !ondu!t operations& and a!hieve the

targeted finan!ial and mar+et performan!e.

When company managers craft and embrace a

strategy they are committing to undertake

one set of actions rather than another.

1–Copyright © 2014 Glo-Bus Software, I!"

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he ows hat Co'prise a &ir'3she ows hat Co'prise a &ir'3s Strategy Strategy

1–4Copyright © 2014 by Glo-Bus Software, I!"

!oheret !oheret

!o'biatio of!o'biatio ofa!tios aa!tios a

approa!hesapproa!hes

about how toabout how to

ru theru the

!o'pay!o'pay

"ow best to respond to"ow best to respond to

changing economic andchanging economic and

market conditionsmarket conditions

"ow to manage the"ow to manage the

functional pieces of thefunctional pieces of the

businessbusiness

"ow to achie!e the firm’s"ow to achie!e the firm’s

performance targets performance targets

"ow to attract please"ow to attract please

and retain customersand retain customers

"ow to compete against"ow to compete against

ri!alsri!als

"ow to capitalize on"ow to capitalize ongrowth opportunitiesgrowth opportunities

and grow the businessand grow the business

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"ood strategyma+ing is ma+ing !hoi!es to

!ompete differently from rivals by/

Appealing to buyers in #ays that set a !ompany apart

from rivalsparti!ularly #hen it !omes to doing #hatrivals don,t do or !an,t do

ta+ing out a mar+et position that is not !ro#ded #ith

other strong !ompetitors

1–5Copyright © 2014 Glo-Bus Software, I!"

The %ssen!e of "ood trategya+ingThe %ssen!e of "ood trategya+ing

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Core Co!eptCore Co!ept

A firm a!hieves A firm a!hieves sustainable competiti!esustainable competiti!ead!antagead!antage #hen buyers are dra#n to#hen buyers are dra#n topur!hase its produ!ts or servi!es ratherpur!hase its produ!ts or servi!es rather

than those of !ompetitors andthan those of !ompetitors and when thewhen thebasis for such purchases is durablebasis for such purchases is durable &&despite efforts of !ompetitors to over!omedespite efforts of !ompetitors to over!omeor other#ise erode the appeal of its offering.or other#ise erode the appeal of its offering.


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3our dependable approa!hes to a!hieving a

!ompetitive edge over rivals/

1. triving to be!ome the industry,s lo#!ost provider being

more !ost effi!ient than rivals5.

2. 6ut!ompeting rivals on important differentiating features

having a more appealing produ!t7servi!e5.

8. *oing a better 9ob than rivals of serving the spe!ial needs

and tastes of buyers in a ni!he mar+et.

4. *eveloping e:pertise and resour!e strengths that rivals

!annot easily imitate or trump #ith !apabilities of their o#n.


trategi! Approa!hes to 'uildingtrategi! Approa!hes to 'uilding

ustainable Competitive Advantageustainable Competitive Advantage

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The Three Tests of a ;inning trategyThe Three Tests of a ;inning trategy


o 9ualify as ao 9ualify as a

wiig strategy,wiig strategy,

a strategy has toa strategy has to

pass all three pass all three

teststests

he Gooess ofhe Gooess of

&it est&it est

ow well oes theow well oes the

strategy fit thestrategy fit the

fir'3s situatio:fir'3s situatio:

he Co'petiti+ehe Co'petiti+e

+atage est+atage est

Is the strategyIs the strategy

resultig i betterresultig i better

strategi!strategi!

perfor'a!e:perfor'a!e:

he ;erfor'a!ehe ;erfor'a!e

estest

Is the strategyIs the strategy

prou!ig betterprou!ig better

fia!ialfia!ial

perfor'a!e:perfor'a!e:

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C).( C)

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~–10Copyright © 2014 by Glo-Bus Software, I!"

© Copyright 2014 by Arthur A. Thompson. All rights reserved. Not for distribution.© Copyright 2014 by Arthur A. Thompson. All rights reserved. Not for distribution.Published and distributed by !"ra# $ill %du!ation& 'urr (idge& )llinoisPublished and distributed by !"ra# $ill %du!ation& 'urr (idge& )llinois Presentation *esignPresentation *esign


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0–11

“ “ If you don’t know where you areIf you don’t know where you are

going any road will take yougoing any road will take you

there.” % the &heshire &at to 'licethere.” % the &heshire &at to 'lice>> ?ewis Carroll,?ewis Carroll,

'lice in Wonderland 'lice in Wonderland

“ “ (ne secret to maintaining a thri!ing(ne secret to maintaining a thri!ing

business is recognizing when itbusiness is recognizing when it

needs a fundamental change.” needs a fundamental change.” >> ar$ %" #ohso,ar$ %" #ohso,

Clayto " Christese, aClayto " Christese, a

eig @ager'aeig @ager'a

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&IGA.( 2"1 he Strategy-a$ig, Strategy-(e!utig ;ro!ess


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*eveloping a strategi! vision entails Thin+ing strategi!ally about the firm,s future dire!tion

The produ!ts it offers

> The mar+ets in #hi!h it parti!ipates

> The !ustomers it !aters to> The businesses in #hi!h it engages

Well-concei!ed !isions are distincti!e and specific to

a particular organization.


Tas+ 1/ *eveloping a trategi! ?ision&Tas+ 1/ *eveloping a trategi! ?ision&

ission& and Core ?aluesission& and Core ?alues

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A strategic !isionstrategic !ision des!ribes the route a firm

intends to ta+e in developing and strengthening its

business. )t lays out the firm,s strategi! !ourse in

preparing for the future.)t provides a panorami! vie# of

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A vision statement remains only a bun!h of

#ords that do not matter unless/

)t paints a !lear pi!ture of

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Core Co!ept/ isio State'etCore Co!ept/ isio State'et

A !ision statement!ision statement must !learly !onvey a firm,s

longterm dire!tion& not obs!ure it in foggy

language.

An effe!tively !ommuni!ated vision is a valuablemanagement tool for enlisting the !ommitment of

the firm,s personnel to a!tions that #ill move the

firm in its intended strategi! dire!tion.


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There,s merit in !apturing the vision in a !at!hy

or easily remembered slogan.

3ed%:/

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;hat )s a Company ission tatement;hat )s a Company ission tatement

All About@ All About@


Ietifies theIetifies the

fir'3s !urretfir'3s !urret

prou!ts aprou!ts a

ser+i!esser+i!es

Ii!ates theIi!ates the

!o'pay3s s!ope!o'pay3s s!ope

of operatios aof operatios a

the te!hologies itthe te!hologies it

e'ployse'ploys

Spe!ifies the buyerSpe!ifies the buyer

ees it see$s toees it see$s to

satisfy aDor thesatisfy aDor the

!usto'er groups a!usto'er groups a

'ar$ets it ser+es'ar$ets it ser+es

Co'pay3s Co'pay3s

issioissioState'etState'et

he role of a !o'pay 'issio state'et is to briefly es!ribe theeterprise3s preset busiess a purpose i laguage that

gi+es the !o'pay its ow ui9ue ietity

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A strategi! vision 3o!uses on a firm,s strategi!

!ourse“the direction we are

headed.”

*es!ribes the firm,s intended

future business ma+eup/

> Customers

> ar+ets

> Te!hnologies

Is always forward looking

A firm,s mission statement 3o!uses on “who we are what

we do and why we are here.”

*es!ribes the firm,s present

business/

> Produ!ts or servi!es

> 'uyer needs being served

> Customer groups it sells to

> !ope of operations andte!hnologies

Is seldom forward-looking

2–1=Copyright © 2014 by Glo-Bus Software, I!"

A trategi! ?ision Covers *ifferent A trategi! ?ision Covers *ifferent

"round than a ission tatement"round than a ission tatement

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Advan!e Auto Parts

)t is the ission of Advan!e Auto Parts to provide

personal vehi!le o#ners and enthusiasts #ith the

vehi!le related produ!ts and +no#ledge that fulfill

their #ants and needs at the right pri!e. 6ur

friendly& +no#ledgeable and professional staff #ill

help inspire& edu!ate and problemsolve for our!ustomers.


%:ample of a ission tatement%:ample of a ission tatement

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$arley*avidson

;e fulfill dreams through the e:perien!e of

motor!y!ling& by providing to motor!y!lists and tothe general publi! an e:panding line of

motor!y!les and branded produ!ts and servi!es

in sele!ted mar+et segments.


%:ample of A ission tatement%:ample of A ission tatement

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The ;alt *isney Company

The mission of The ;alt *isney Company is to

be one of the #orldBs leading produ!ers and

providers of entertainment and information. sing

our portfolio of brands to differentiate our !ontent&

servi!es and !onsumer produ!ts& #e see+ to

develop the most !reative& innovative andprofitable entertainment e:perien!es and related

produ!ts in the #orld.


%:ample of a ission atement%:ample of a ission atement

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3amily *ollar tore

3or 6ur Customers/ A !ompelling pla!e to shop

. . .by providing !onvenien!e and lo# pri!es

3or 6ur Asso!iates/ A !ompelling pla!e to #or+

. . . by providing e:!eptional opportunities and

re#ards for a!hievement

3or 6ur )nvestors/ A !ompelling pla!e to invest. . . by providing outstanding returns


%:ample of a ission tatement%:ample of a ission tatement

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(b)ecti!es represent a managerial commitment

to achieving particular results and outcomes

To be #ell#orded and properlyphrased&

an ob9e!tive must/ 'e *uantifiable or measurable

Contain a deadline for a!hievement

pellout how much of what kind of performan!e bywhen


Tas+ 2/ etting 6b9e!tivesTas+ 2/ etting 6b9e!tives

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+inancial ob)ecti!es+inancial ob)ecti!es relate to the finan!ial

performan!e targets management has established

for the firm to a!hieve

Strategic ob)ecti!esStrategic ob)ecti!es relate to targeted out!omes

that indi!ate the firm is strengthening its mar+et

standing& !ompetitive vitality& and future business

prospe!ts


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A !ompany,s vision& ob9e!tives& strategy& and

approa!h to strategy e:e!ution are never final.

anaging strategy is an ongoing pro!ess& not an

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~–27Copyright © 2014 by Glo-Bus Software, I!"© Copyright 2014 by Arthur A. Thompson. All rights reserved. Not for distribution.© Copyright 2014 by Arthur A. Thompson. All rights reserved. Not for distribution.Published and distributed by !"ra# $ill %du!ation& 'urr (idge& )llinoisPublished and distributed by !"ra# $ill %du!ation& 'urr (idge& )llinois Presentation *esignPresentation *esign


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A!tions to steer a firm in a different dire!tion or

alter its strategy must be predi!ated on deep

understanding of t#o fa!ets of its situation/

1. The firm,s industry and !ompetitive environment andthe for!es a!ting to reshape its environment

2. The firm,s o#n mar+et position and !ompetitiveness

> )ts resour!es and !apabilities

> )ts strengths and #ea+nesses visDvis rivals

> )ts #indo#s of opportunity

–28Copyright © 2014 by Glo-Bus Software, I!"

nderstanding a Company,s ituationnderstanding a Company,s ituation

&IGA.( 1&IGA.( 1 & hi $i St t i ll b t th C 3 Sit ti& hi $i St t i ll b t th C 3 Sit ti

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&IGA.( "1&IGA.( "1 &ro' hi$ig Strategi!ally about the Co'pay3s Situatio&ro' hi$ig Strategi!ally about the Co'pay3s Situatio

to Choosig a Strategyto Choosig a Strategy

Copyright © 2014 by Glo-Bus Software, I!" –2=

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%:ternal fa!tors and influen!es in the

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There are si: Euestions that must be as+ed and ans#ered/

1. ;hat !ompetitive for!es do industry members fa!e& and

ho# strong are they@ @

2. ;hat for!es are driving !hanges in the industry& and ho##ill they impa!t !ompetitive intensity and profitability@

8. ;hat mar+et positions do industry rivals o!!upy#ho is

strongly positioned and #ho is not@

4. ;hat strategi! moves are rivals li+ely to ma+e ne:t@

F. ;hat are the +ey fa!tors for future !ompetitive su!!ess@

G. )s the industry outloo+ !ondu!ive to good profitability@


Assessing a Company,s )ndustry and Assessing a Company,s )ndustry and

Competitive %nvironmentCompetitive %nvironment

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Competitive maneuvering among industry rivals is

e!er-changing e!er-changing & as !ompeting sellers initiate round

after round of offensive and defensive moves&

emphasi-ing first one mi: of !ompetitive #eapons

and then another in efforts to improve their mar+et

positions and profitability.

,he ongoing maneu!ers and )ockeying for position create a

continually e!ol!ing competiti!e landscape where themarket battle ebbs and flows sometimes takes

unpredictable twists and turns and

produces winners and losers.


&IGA.( 4&IGA.( 4 he E%eaposF hat a Co'pay Ca Ase tohe E%eaposF hat a Co'pay Ca Ase to

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&IGA.( "4&IGA.( "4 he %eapos hat a Co'pay Ca Ase tohe %eapos hat a Co'pay Ca Ase to

Battle .i+als Battle .i+als

Copyright © 2014 by Glo-Bus Software, I!" –

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)ndustry !onditions !hange be!ause importantfor!es are driving industry parti!ipants !ompetitors&

!ustomers& or suppliers5 to alter their a!tions.

,he dri!ing forces in an industry are the ma)orunderlying causes of changing industry and

competiti!e conditionsthey ha!e the biggest

influence on how the industry landscape will be

altered.


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A strategic groupstrategic group is a !luster of industry rivalsthat employ similar !ompetitive approa!hes& have

produ!t offerings that appeal to similar types of

buyers& and thus o!!upy similar mar+et positions.


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$ave you studied the strategi! group maps for ea!h geographi!

region sho#n in the Competitive )ntelligen!e (eport@

'ased on these maps& #hi!h rival firms are your !losest !ompetitors

in ea!h geographi! region@

;hi!h rival firms are distant !ompetitors@

*o any of the four regional strategi! group maps indi!ate that there

are many rival firms grouped very !lose together& signaling they are

members of an

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ey success factorsey success factors are the strategy elements&produ!t attributes& resour!e strengths& !ompetitive

!apabilities& and mar+et a!hievements #ith the

greatest impa!t on future !ompetitive su!!ess in

the mar+etpla!e.

S+s are so important to competiti!e success that

how well a firm measures up on each industry S+

can spell the difference between being a strongcompetitor and a weak competitorand sometimes

between profit and loss.


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'ccess to distribution to get a firm,s brand sto!+ed and

favorably displayed in retail outlets.

Image to indu!e !onsumers to buy a parti!ular firm,s

produ!t brand name and attra!tiveness of pa!+aging are

+ey de!iding fa!tors5.

/ow-cost production capabilities to +eep selling pri!es

!ompetitive.

Sufficient sales !olume to a!hieve s!ale e!onomies inmar+eting e:penditures.


%:ample/%:ample/ I3s for 'ottled ;ater )ndustryI3s for 'ottled ;ater )ndustry

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'ppealing designs and color combinations to !reate

buyer appeal

/ow-cost manufacturing efficiency to +eep selling

pri!es !ompetitive Strong network of retailers0company-owned stores to

allo# stores to +eep bestselling items in sto!+

&le!er ad!ertising to effe!tively !onvey a spe!ifi! image

to indu!e !onsumers to pur!hase a parti!ular label

–=Copyright © 2014 by Glo-Bus Software, I!"

%:ample/%:ample/ I3s for the (eadyto;earI3s for the (eadyto;ear

Apparel )ndustry Apparel )ndustry

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~–40Copyright © 2014 by Glo-Bus Software, I!"© Copyright 2014 by Arthur A. Thompson. All rights reserved. Not for distribution.© Copyright 2014 by Arthur A. Thompson. All rights reserved. Not for distribution.

Published and distributed by !"ra# $ill %du!ation& 'urr (idge& )llinoisPublished and distributed by !"ra# $ill %du!ation& 'urr (idge& )llinois Presentation *esignPresentation *esign


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“ “ 1efore e#ecuti!es can chart a new1efore e#ecuti!es can chart a new

strategy they must reach a commonstrategy they must reach a common

understanding of the company’s currentunderstanding of the company’s current position.” position.”

>> %" Cha @i' a%" Cha @i' a

.ee auborge.ee auborge

H i 1 $ ; ll ) h 3i ,

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'egin by understanding #hat its strategy is/

)dentify the firm,s !ompetitive approa!h

> Jo#er!osts relative to rivals@

> A different or better produ!t7servi!e@

> uperior ability to serve a parti!ularmar+et ni!he or group of buyers@

*etermine its !ompetitive s!ope

> 'road or narro# geographi! mar+et !overage@

> ;ide or narro# produ!t line@

%:amine re!ent strategi! moves

)dentify fun!tional strategies


Huestion 1Huestion 1// $o# ;ell )s the 3irm,s$o# ;ell )s the 3irm,s

Present trategy ;or+ing@Present trategy ;or+ing@

I ) di t f $ ; ll

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'est indi!ators/

;hether the firm is meeting or beating its finan!ial and strategi!

performan!e targets

;hether the firm is an aboveaverage industry performer

;hether the firm is gaining !ustomers and out!ompeting one or

more of its !lose rivals

2ersistent shortfalls in meeting performance targets

and weak performance relati!e to ri!als are warning

signs that the firm has a weak strategy or suffers

from poor strategy e#ecution or both.


Iey )ndi!ators of $o# ;ellIey )ndi!ators of $o# ;ell

a Company,s trategy )s ;or+inga Company,s trategy )s ;or+ing

% l i C , 3i i l

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A!!urate diagnosis of a !ompany,s finan!ial

performan!e and finan!ial statements re*uires

some number-crunching.

The finan!ial ratios in Table 4.1 provide guidan!e

and dire!tion in #hat numbers need to be

!al!ulated and ho# to interpret them.


%valuating a Company,s 3inan!ial%valuating a Company,s 3inan!ial

Performan!ePerforman!e

B?( 4"1B?( 4"1 @ey &ia!ial .atios/ ow to Cal!ulate he' a %hat hey ea@ey &ia!ial .atios/ ow to Cal!ulate he' a %hat hey ea

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Huestion 2/Huestion 2/ Are the 3irm,s (esour!es and CapabilitiesAre the 3irm,s (esour!es and Capabilities

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S%) alysis

)s a po#erful analyti! tool for evaluating a #hether a firm,s overall

situation is fundamentally healthy or unhealthy.

3o!uses on the firm,s resour!e Stregths and %ea$esses&mar+et )pportuities& and e:ternal hreats.

Aids managers in !rafting a strategy that/

> Capitali-es on the firm,s resour!e strengths

> Aims sEuarely at !apturing its best mar+et opportunities> *efends against e:ternal threats to the firm,s future #ellbeing and

business prospe!ts


Huestion 2/Huestion 2/ Are the 3irm s (esour!es and Capabilities Are the 3irm s (esour!es and Capabilities

Attra!tive and ;ellmat!hed to )ts ar+et Attra!tive and ;ellmat!hed to )ts ar+et

6pportunities and %:ternal Threats@6pportunities and %:ternal Threats@

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A resource strengthresource strength is a uniEue asset& something a firm does #ell

or an attribute that enhan!es its !ompetitiveness/

A s+ill& spe!iali-ed e:pertise& or !ompetitively important !apability

?aluable physi!al assets

?aluable human assets and intelle!tual !apital

?aluable organi-ational assets

?aluable intangible assets

An a!hievement or attribute that puts the firm in a position ofmar+et advantage

Competitively valuable allian!es or !ooperative ventures


)dentifying Company (esour!e trengths)dentifying Company (esour!e trengths

;here Are a 3irm,s Competen!ies;here Are a 3irm,s Competen!ies

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ome !ompeten!ies spring from profi!ien!y in a single dis!ipline

or fun!tion and may be performed in a single department or

organi-ational unit.

$o#ever& many maybe most@5 !ompeten!ies& !ore

!ompeten!ies& distin!tive !ompeten!ies& and !ompetitive!apabilities are inherently multidis!iplinary or !rossfun!tional

and are the produ!t of effe!tive !ollaboration among people #ith

different e:pertise in different organi-ational units.

%:amples of Core or *istin!tive Competen!ies/

The ability to speed ne#7ne:tgeneration produ!ts to mar+et

+ills7e:pertise in produ!ing a highEuality produ!t at a lo# !ost

The !apability to fill !ustomer orders a!!urately and s#iftly.


;here Are a 3irm s Competen!ies;here Are a 3irm s Competen!ies

Jo!ated@Jo!ated@

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Core Co!ept/ Core Co'pete!eCore Co!ept/ Core Co'pete!e

A core competencecore competence is an a!tivity that a firmperforms not only !onsistently #ell and at

a!!eptable !ost& but that is also central to its

strategy and competitiveness.

' core competence is a more important

resource strength than a competence because

it adds power to a firm’s strategy and has abigger positi!e impact on its competiti!e

strength and profitability "


C C *i i i CC C t *i ti ti C t

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Core Co!ept/ *isti!ti+e Co'pete!eCore Co!ept/ *isti!ti+e Co'pete!e

A !ompany possesses a distincti!e competencedistincti!e competence#hen it has demonstrated ability to perform a

!ompetitively important a!tivity better tha its

ri+als"

' distincti!e competence is a competiti!ely

superior resource strength because it

represents a le!el of proficiency that ri!als do

not ha!e. &onse*uently a distincti!ecompetence can be a basis for sustainable

competiti!e ad!antage.


)dentif ing (eso r!e ;ea+nesses

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A resource weaknessresource weakness& or !ompetitive defi!ien!y&

is something a firm la!+s& does poorly& or that puts

it at a disadvantage in the mar+etpla!e

(esour!e #ea+nesses relate to/

)nferior or unproven s+ills& !apabilities& e:pertise& or

intelle!tual !apital in important areas of the business

*efi!ien!ies in !ompetitively important physi!al&organi-ational& or intangible assets

issing or !ompetitively #ea+ !apabilities in +ey areas


)dentifying (esour!e ;ea+nesses

and Competitive *efi!ien!ies

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B?( 4"2 %hat to ?oo$ for i Ietifyig ar$et )pportuitiesy g pp


> 6penings to #in mar+et share from rivals

> harply rising buyer demand for the industry,s produ!t

> erving additional !ustomer groups or mar+et segments

> %:panding into ne# geographi! mar+ets

> %:panding the !ompany,s produ!t line to meet a broader range of !ustomer needs

> tili-ing e:isting !ompany s+ills or te!hnologi!al +no#ho# to enter ne# produ!t lines or

ne# businesses

> 6nline sales via the )nternet

> )ntegrating for#ard or ba!+#ard

> 3alling trade barriers in attra!tive foreign mar+ets

> A!Euiring rival firms or !ompanies #ith attra!tive te!hnologi!al e:pertise or !apabilities> %ntering into allian!es or 9oint ventures to e:pand the firm,s mar+et !overage or boost

its !ompetitive !apability

> 6penings to e:ploit emerging ne# te!hnologies

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y gy g


> )n!reasing intensity of !ompetition among industry rivalsmay sEuee-e profit margins

> lo#do#ns in mar+et gro#th

> Ji+ely entry of potent ne# !ompetitors

> Joss of sales to substitute produ!ts

> "ro#ing bargaining po#er of !ustomers or suppliers

> A shift in buyer needs and tastes a#ay from the industry,s produ!t

> Adverse demographi! !hanges that threaten to !urtail demand for the industry,s

produ!t

> ?ulnerability to unfavorable industry driving for!es

> (estri!tive trade poli!ies on the part of foreign governments

> Costly ne# regulatory reEuirements

> Tight !redit !onditions

> (ising pri!es for energy or other +ey inputs

C C tC C t

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1enchmarking 1enchmarking is a potent tool for learning #hi!hfirms are best at performing parti!ular a!tivities

and then using their te!hniEues

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Carefully revie# the ben!hmar+ing data provided in the )ndustry (eport

after ea!h de!ision round.

There are almost 2 pages of data sho#ing ho# your !ompany,s !osts in the

prior year !ompared against the industry,s lo#& high& and average values for

a big variety of the !ost !omponents in your !ompany,s value !hain.

)f your !ompany,s !osts are deemed

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re you regularly 'oitorig your fir'3s !o'petiti+e stregths a

wea$esses +is--+is ri+al fir's i ea!h geographi! regio Hsee the

botto' se!tio o ea!h page of the Co'petiti+e Itellige!e .eport:

I !raftig your fir'3s strategy a 'a$ig e!isio etries ea!h year,

are you tryig to !apitaliJe o your fir'3s !o'petiti+e stregths a to!orre!t your fir'3s !o'petiti+e wea$esses:

a+e you use the 'eus at the top of ea!h page of the Co'petiti+e

Itellige!e .eports to +iew the ata for the !o'petiti+e stregths a

wea$esses of ri+al iustry fir's:

3ight this information be of !alue in crafting your firm’s strategy in the

upcoming year4


Huestions for imulation Company

Coanagers

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After ea!h de!ision round& do you ta+e into a!!ount your !ompany,s

!ompetitive strengths and #ea+nesses listed on ea!h page of the

Competitive )ntelligen!e (eport5 in !rafting a strategy for ea!h

geographi! region for the up!oming de!ision round@

'efore pro!eeding to enter de!isions for ea!h up!oming de!ision

round& do your regularly ma+e a list of the strategi! issues and

problems your !ompany needs to address and ma+e sure that you

enter de!isions intended to resolve ea!h and every one of these

issues7problems@

)f not& then is the failure to !raft a strategy mat!hed to your

!ompany,s internal situation and to dealing #ith

Documents

Chapter1 BUS 4998-01 SP 2016