【正文】 213 Copyright 169。 2022 by The McGrawHill Companies, Inc. All rights reserved. Porter’s Five Forces Model of Industry Competition Threat of new entrants Bargaining power of buyers Bargaining power of suppliers Threat of Substitute products and services Adapted from Exhibit Porter’s Five Forces Model of Industry Competition 215 Copyright 169。 2022 by The McGrawHill Companies, Inc. All rights reserved. The Bargaining Power of Buyers ? Buyers threaten an industry ? Force down prices ? Bargain for higher quality or more services ? Play petitors against each other 217 Copyright 169。 2022 by The McGrawHill Companies, Inc. All rights reserved. The Bargaining Power of Suppliers ? Suppliers can exert power by threatening to raise prices or reduce the quality of purchased goods and services 219 Copyright 169。 2022 by The McGrawHill Companies, Inc. All rights reserved. The Bargaining Power of Suppliers ? A supplier group will be powerful when ? The supplier’s product is an important input to the buyer’s business ? The supplier group’s products are differentiated or it has built up switching costs for the buyer ? The supplier group poses a credible threat of forward integration 221 Copyright 169。 2022 by The McGrawHill Companies, Inc. All rights reserved. The Intensity of Rivalry among Competitors in an Industry ? Price petition ? Advertising battles ? Product introductions ? Increased customer service or warranties 223 Copyright 169。 2022 by The McGrawHill Companies, Inc. All rights reserved. Strategic Group Map ? Strategic groups ? Cluster of firms that share similar strategies. ? Value of strategic grouping ? Help an anization identify barriers of one group ? Help an anization verify its real petitors ? Help an anization choose its future direction ? Help us understand the trend of an industry ? Dimensions ? Breadth of product。Price/quality。 2022 by The McGrawHill Companies, Inc. All rights reserved. The World Automobile Industry: Strategic Groups Adapted from Exhibit The World Automobile Industry: Strategic Groups 228 Copyright 169。 2022 The McGrawHill Ryerson Limited. ValueChain ? Sequential process of valuecreating activities 230 Copyright 169。 2022 The McGrawHill Ryerson Limited. How Resources and Capabilities Lead to Advantages Adapted from Exhibit Marks amp。 2022 by The McGrawHill Companies, Inc. All rights reserved. Four Attributes of Resources and Capabilities (Competitive Advantage) Unique possessed by few, if any, current and potential petitors Costly to when other firms either can’t obtain them Imitate or must obtain at a much higher cost * an Valuable allow firm to neutralize threats or exploit opportunities in its external environment Irreplaceable Can’t be replaced by other kinds of resources or capabilities 233 Copyright 169。 Adapted from J. Barney, “Gaining and Sustaining Competitive Advantage”, AddisonWesley, 1997. Copyright 169。 2022 by The McGrawHill Companies, Inc. All rights reserved. Strategic Formulation ? Ch 5 BusinessLevel Strategy ? Overall Cost Leadership Strategy (P117) ? Differentiation(P124) ? Focus(P129) ? Industry Life Cycle (P137) 536 Copyright 169。 2022 McGrawHill Ryerson Limited Differentiation Differentiation can take many forms ? Prestige or brand image ? Technology ? Innovation ? Features ? Customer service ? Dealer work 538 Copyright 169。 2022 McGrawHill Ryerson Limited Industry LifeCycle Life cycle of an industry refers to the stages of ? Introduction ? Growth ? Maturity ? Decline portrays how sales volume for a product or an entire industry changes over its lifetime. helps to understand the dynamic nature of strategy. 240 Copyright 169。A(P165) ? Organizational Fit ? Vertical integration ? Horizontal Integration 241 Copyright 169。 2022 by The McGrawHill Companies, Inc. All rights reserved. Business 2 Business 1 Related Diversification Related businesses ? Businesses are related if they share a mon market, technology, raw material, or any one of other primary activities. Production facilities Distribution channels Specialized skills Manufacturing facilities 243 Copyright 169。 2022 by The McGrawHill Companies, Inc. All rights reserved. How to achieve diversification? ? Mergers and acquisitions ? Strategic alliances amp。 2022 by The McGrawHill Companies, Inc. All rights reserved. Potential limitations with Mamp。 2022 by The McGrawHill Companies, Inc. All rights reserved. Organizational fit ? When two anizations or business units are merged or acquisition happened, and the anizational management processes, cultures, system, and structures are matching(similar), this is anizational fit. 647 Copyright 169。 2022 McGrawHill Ryerson Limited. Vertical Integration In making decisions associated with vertical integration, four issues should be considered: 1. Are we sat