工商管理专业MBALectureLectu(3)

1、Industry SectorLecture EightDr Ita ODonovan1精选pptIndustry AnalysisThe naturalEnvironmentThDemographic StructureSocial StructureThe Natural EnvironmentDemographic StructureSocial StructureThe National/InternationaleconomyTechnologyGovernmentand politicsThe IndustryEnvironmentSuppliersCompetitorsCusto

2、mers2精选pptThe spectrum of industry StructuresPerfectCompetitionOligopolyDuopolyMonopolyConcentrationMany FirmsA few FirmsTwo FirmsOne firmEntry andExit BarriersNo BarriersSignificant BarriersHigh BarriersProductDifferentiationHomogeneousProduct ( commodity) Potential for Product DifferentiationInfor

3、mationAvailabilityNo impediments to information flow Imperfect availability of Information3精选pptThe five forces of industry competitivenessSUPPLIERSINDUSTRYCOMPETITORSRivalry amongexisting firmsPOTENTIALENTRANTSSUBSTITUTESBUYERSThreat of newEntrantsThreat of newsubstitutesBargaining power of buyersB

4、argaining power of suppliers4精选pptThe Structural determinants of the Five ForcesSUPPLIER POWERFactors determining power of suppliers relative to producers; same as those determining power of producers relative to buyers- see Buyer Power BoxINDUSTRY RIVALRYConcentrationDiversity of competitorsProduct

5、 differentiationExcess capacity and exit barriersCost conditionsTHREAT OF SUBSTITUTESBuyer propensity to substituteRelative prices and performance of substitutesTHREAT OF ENTRYCapital RequirementsEconomies of scaleAbsolute cost advantageProduct differentiationAccess to distribution channelsGovernmen

6、t and legal barriersRetaliation by established producersBUYER POWERPrice Sensitivity Bargaining PowerCost of product relative to total cost Size and concentration of buyers relative to producersProduct differentiation, competition between Buyers switching costs; Buyers InformationBuyers Buyers abili

7、ty to backward integrate5精选pptSome key approachesThere are two key perspectives in the debate about influence in the industrial sectorThose who believe that the industry shapes the firmAndThose who believe that the firm can shape the industry.Essentially this is an environmental questionHow malleabl

8、e is the industrial environment ?精选pptSome Key Approaches and QuestionsAnother way of looking at this is to say does a firm comply with existing rules or choose to influence and create new conditions?We can take an evolutionary perspective and say that individual firms cannot shape the industry they

9、 inhabit. They adapt to surviveSurvival of the fittest Darwins theory7精选pptSome key approaches and QuestionsThe Industry creation perspective says that the environment can be manipulated.Rules can be altered more flexibility than seems apparent,Pressure can be applied by those who know how.Advocates

10、 of the creation perspective do not deny evolution exists in industry, but they say that is because firms did not challenge and innovative enough.8精选pptTwo PerspectivesIndustry EvolutionIndustry creationEmphasis onCompliance over choiceChoice over complianceIndustry ChangesUncontrollable evolutionar

11、y processesControllable creation processesChange DynamicsEnvironment selects fit firmsFirms create fitting environmentFirm success due toFitness to industry demandsManipulation of industry demandsIndustry malleabilityLow, slowHigh, fastNormative applicationPlay by the rules (adapt)Change the rules (

12、innovate)Firm profitabilityIndustry- dependentFirm-dependentPoint of viewDeterministicVoluntaristic9精选pptTwo Important conceptsIndustry Rules: these are the demands dictated to the organisation by the industry context, that limit the scope of economically rational behaviour. Industry recipes: is a c

13、ognitive map that people have about the structure and demands of the industry.10精选pptProduct Life Cycle: strategy, competition and performanceIntroductionGrowthMaturityDeclineBuyers and Buyer behaviourHigh Income purchaser; Buyer inertia, Buyer must be convinced to try productWidening buyer group. C

14、onsumer will accept uneven qualityMass market, Saturation, Repeat buying, Choosing among brands is the ruleCustomers are sophisticatedBuyers of the productProducts and product changePoor quality, product development and design are key, different design variations, frequent changesProducts have techn

15、ical and performance differentiation. Reliability key for complex products. Competitive improvementsSuperior quality, less product differentiation, less rapid changes. StandardisationTrade-ins become significant.Little product differentiation.Product quality becomes variable.MarketingVery high marke

16、ting costsCosts are high for salesCreaming price strategyStill high advertising costs but lower costs on sales.Advertising and distribution key for nontechnical products.Market segmentationExtend life cycle. Broaden lineService and deals more prevalent. Packaging importantLow advert/sales and other

17、marketingManufacturing and DistributionOvercapacity, short- production runs. High skilled labour contentHigh production costsUnder capacity, shift towards mass production, Scramble for distribution, Mass channelsSome over capacity, Increase in the stability of manufacturing process. Lower labour ski

18、lls.Long production runs with known techniques. Distribution is streamlined and effectiveMass channels.Mass productionSubstantial over capacitySpeciality channels11精选pptProduct Life Cycle: strategy, competition and performance Continued.IntroductionGrowthMaturityDeclineR and DChanging Production tec

19、hniquesForeign TradeSome ExportsSignificant exports, Few ImportsFalling exports, significant importsNo exports, significant importsOverall StrategyBest period to increase mkt. share . Rand D, engineering are key functionsPractical to change price or quality image. Marketing the key functionBad time

20、to increase market share, particularly if low share company. Having competitive costs becomes key. Bad time to change price image or quality image. Marketing is keyCompetitionFew companiesEntry. Many competitors. Lots of mergers and casualtiesPrice competition, ShakeoutIncrease in private brandsExit

21、s, fewer competitorsRiskHigh RiskRisks can be taken because growth covers them upCyclicality sets inMargins and ProfitsHigh prices and marginsLow profitsPrice elasticity to individual seller not as great as in maturityHigh profits, highest profits, fairly high prices. Lower prices than introductory

22、phase. Recession resistant. Good acquisition climateFalling prices, lower profits and margins. Lower dealer margins. Increased stability of market shares and price structure. Poor acquisition climate- tough to sell companies.Low prices and margins. Falling pricesPrices might rise in late decline12精选

23、pptThink of Industry in terms of whole systemAn industry is an interrelated whole. Change in one part will have an effect on the whole system. For example one firm introduces a new product that has a knock on effect on the industry.Consideration needs to be given to the following factors when thinki

24、ng about industry development:Industry ConsolidationHigh mobility/increases consolidationRelationship between Industry Concentration and Mobility BarriersLow or falling mobility/ no concentration13精选pptThink of Industry in terms of whole system cont.Exit Barriers and ConsolidationExit barriers are a

25、n inhibitor to consolidationLong Run profit potential and future structurePhases occur in relation to profit margins, transitions occur during leveling out of growth. Rivalry means weaker firms may exit. Changes in Industry BoundariesStructural changes in industry such as innovations, suppliers might become competitors for example ( forward integration)Firms and their influence on Indus