【正文】 s the world ? Targeting a broad set of the urban population, increasingly offering a bundled product (., meals) at a low price in major cities around the world McDONALD’S EXAMPLE 5 ? BU STRATEGY REVIEW INTERACTIONS Highly interactive debate driven by factbased understanding of environment and internal capabilities How do you expect Competitor A to react? How sustainable is your business model? Can it be easily duplicated? How robust are your contingency plans? How quickly can you shift your business emphasis to capture industry opportunities? BUCEO 6 ? BU STRATEGIC PLAN DEVELOPMENT Industry dynamics and implications Environmental and internal assessment Competitive assessment Internal assessment ? What are the major changes in industry dynamics and resulting opportunities and risks? ? What are your petitive strengths and weaknesses? ? How does your current business emphasis fit with industry opportunity and petitive landscape? Strategy articulation Strategic definition and implications Strategic initiatives Financial projections ? What strategy will your BU pursue over the next 3 years? ? What will be the impact of major strategic initiatives? ? What are the expected financial returns of your strategy? + + + + Risk/contingencies strategic alternatives ? What strategic alternatives have you considered? + 7 ? INDUSTRY DYNAMICS AND IMPLICATIONS ? Economics of demand – By segment – Substitutes, ability to differentiate – Volatility, cyclicality ? Economics of supply – Producer concentration and diversity – Import petition – Capacity utilization – Entry/exit barriers – Cost structure (fixed and variable) ? Industry chain economics – Customer and supplier bargaining power What are the major changes in industry dynamics and the resulting opportunities and risks? How is industry structure changing with respect to demand, supply, and industry chain economics? What are the resulting opportunities and risks? What is the expected petitor conduct? What are the resulting opportunities and risks? What are the present and future external factors that could present new opportunities and risks? ? Major industry petitor moves – Marketing initiatives – Industry capacity changes – MAs, divestitures – Vertical integration/disaggregation – Alliances and partnerships – Cost control and efficiency improvements ? Impact and likelihood of major industry discontinuities – Changes in regulation/government policy – Technological breakthroughs Key question Subquestions Issues to be considered* * May or may not be applicable to all BUs What industry are you peting in? What are the various segments in the industry? ? Industry definition ? Industry segmentation – Definition – Sizing 8 ? SEGMENT ANALYSIS ILLUSTRATIVE Industry boundaries Segments Industry segments ? Relatively distinct subgroupings within the industry ? Market is relatively similar within the segment but different across segments ? Different industry dynamics may vary in importance in different segments 9 ? Producers Industry S ? Technology breakthroughs ? Changes in government policy/regulations –Domestic –International Economics of demand ? Availability of substitutes ? Differentiability of products ? Rate of growth ? Volatility/cyclicality Economics of supply ? Concentration of producers ? Import petition ? Diversity of producers ? Fixed/variable cost structure ? Capacity utilization ? Entry/exit barriers Industry chain economics ? Bargaining power of input suppliers ? Bargaining power of customers Marketing ? Pricing ? Volume ? Advertising/promotion ? New products/RD ? Distribution Capacity change ? Expansion/contraction ? Entry/exit ? Acquisition/merger/ divestiture Vertical integration ? Forward/backward integration ? Vertical joint ventures ? Longterm contracts Internal efficiency ? Cost control ? Logistics ? Process RD ? Organization effectiveness Finance ? Profitability ? Value creation Technological progress Employment objectives External shocks Feedback tructure C onduct P erformance STRUCTURECONDUCTPERFORMANCE (SCP) MODEL 10 ? 1. Determinants of supplier power ? Differentiation of inputs ? Switching costs of suppliers and firms in the industry ? Presence of substitute inputs ? Supplier concentration ? Importance of volume to supplier ? Cost relative to total purchases in the industry ? Impact of inputs on cost or differentiation ? Threat of forward integration relative to threat of backward integration by firms in the industry 2. Determinants of barriers to entry ? Economies of scale ? Proprietary product differences ? Brand identity ? Switching costs ? Capital requirements ? Access to distribution ? Absolute cost advantages – Proprietary learning curve – Access to necessary inputs – Proprietary, lowcost product design ? Government policy ? Expected retaliation 5. Rivalry determinants ? Industry growth ? Fixed (or storage) cost/value added ? Intermittent overcapacity ? Product differences ? Brand identity ? Switching costs ? Concentration and balance ? Informational plexity ? Diversity of petitors ? Corporate stakes ? Exit barriers 3. Determinants of buying power ? Bargaining leverage –Buyer concentration vs. firm concentration –Buyer volume –Buyer switching costs relative to firm switching costs –Buyer information –Ability to backward integrate –Substitute products –Pullthrough 4. Determinants of substitution threat ? Relative price performance of substitutes ? Switching costs ? Buyer propensity to substitute 2. New entrants 3. Buyers 4. Substitutes Inten