【正文】 ncumbents INDUSTRY COMPETITORS Rivalry is intense if: ? Competitors are numerous or roughly equal in power or size ? Industry growth is slow ? There are high fixed costs or the product is perishable ? The product lacks differentiation or switching costs ? Capacity is augmented in large increments ? Exit barriers are high ? Rivals are diverse in strategies, origins, and personalities SUBSTITUTES Threat of substitutes is high if: ? There is an abundance of products or services that serve the same function ? The priceperformance tradeoff of substitutes is attractive SUPPLIERS Bargaining power of suppliers is greater if: ? The supply industry is dominated by a few panies or is more concentrated than the buying industry ? The supply product is differentiated or there are high switching costs ? There are few substitutes ? The buying industry is not an important customer of the supply industry ? The supply industry poses a credible threat of forward integration BUYERS Bargaining power of customers is greater if: ? The customer group is concentrated or buys in large volume ? Products purchased are undif。 where lines are drawn. Practitioners must be creative, careful and consistent with market data. Citations Client and Industry Experience Experience Curve Source List ? David A. Aaker, “Developing Business Strategies”, 5th Edition ? The Boston Consulting Group, “Perspectives on Strategy” ? Robert M. Grant, “Contemporary Strategy Analysis”, 3rd Edition ? Henry Mintzberg, Bruce Ahlstrand, Joseph Lampel, “Strategy Safari: A Guided Tour Through the Wilds of Strategic Management Financial Modeling Summary Financial Modeling The financial model will allow us to test management assumptions and understand how different actions may affect performance on some key petitive dimensions. 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Financial Modeling Follow these steps to successfully create a Financial Model Step 1 Gather information on key drivers ie. ? From the cash flow analysis performed as part of the SVA ? Data and insight from Voice of the Customer is another source of insight Step 2 Map the relationships and identify factors which reinforce one another vs. those that have a negative relationship (. increase in price may have a negative effect on demand) Step 3 Build the financial model based on the causeeffect relationships identified Step 4 Gather data from industry analysis or internal corporate data Step 5 Test the quality of the model by doing manual calculations on some what if” Step 6 Perform what if to assess the pleteness of the model Citations Client and Industry Experience Financial Modeling ? Flemings Fund Management Ltd (FFML)/Banking/KIT database ? Galileo/Travel/ Spencer Lin Vasu Krishnamurthy ? Osh Kosh B’ Gosh?SP/Retail/Mike Weiss ? PwC MCS/Consulting/Vasu Krishnamurthy ? United Airlines/Travel/Vasu Krishnamurthy ? Robert M. Grant, “Contemporary Strategy Analysis”, 3rd Edition Source List The Fit vs. Attractiveness Model optimizes strategy by developing a sense of the realistic state of the market and pany affairs. The Model pares product fit with a market to product fit with a pany’s objectives. Fit vs. Attractiveness Model Summary The Fit vs. Attractiveness Model ? Baked Goods ? Bulbs ? Cheese ? Fruit ? Kitchenware ? Meat/Seafood ? Nursery Stock ? Snacks/Candy ? Stationery ? Decorative Accessories ? Indoor Plants ? Nuts ? Seeds ? Trees/Shrubs ? Gourmet Food ? Bed/Bath ? Pool/Patio/Gardening ? Crafts ? Personal Care/Grooming ? Specialty Apparel ? Camping Equipment ? Children’s Apparel ? Drug/Vitamins/Health Food ? Hardware/Tools ? Hosiery/Lingerie ? Women’s Apparel ? Men’s Apparel ? Women’s Large Size Apparel ? Athletic Equipment ? Fishing Equipment ? Hunting Equipment ? Sporting Good Apparel Category Fit With Company High Medium Low Low Medium High Category Attractiveness CATEGORY EVALUATION SPECIALTY/SPINOFF Categories included in existing or planned specialty books Remended additional specialty book venture EXAMPLE Approach Fit vs. Attractiveness Model Step 1 Identify product, category or market overall attractiveness as being low, medium, or high. Plot along xaxis. Step 2 Identify product category, or market fit with pany objectives as being low, medium, or high. Plot along yaxis. Step 3 Evaluate newly created matrix。 identify gaps ? Define expertise, info required to make decision, anizational requirements ? Define evolving nature of anization and information flows ? Key decisions ? Key individuals involved in decisionmaking process ? Information flows ? Management interviews ?