CHAPTER 4
Environmental
Scanning and
Industry Analysis
Continuation of last session’s lecture
THOMAS L. WHEELEN
J. DAVID HUNGER
4-1
Porter’s Approach to Industry Analysis
Rivalry Among Existing Firms –
–Number of competitors
–Rate of industry growth
–Product or service characteristics
–Amount of fixed costs
–Capacity
–Height of exit barriers
–Diversity of rivals
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4-2
Executive summary
Overall customer care market
shares for 2009
Figure 1: Customer care market shares by revenue,
worldwide, 2009 [Source: Analysys Mason, 2010]
•
Oracle
26%
Other
36%
AsiaInfo
3%
•
Amdocs
19%
SAP
4% Huawei
6%
Convergys
6%
Total revenue: USD2118 million
•
The customer care market generated
USD2.118 billion in revenue in 2009, 3.1%
higher than the USD2.055 billion in 2008. The
revenue for 2008 is higher than was reported
last year (USD1.186 billion) because it was
restated. The difference came primarily from a
restatement of the size of the customer care
market in China, of which we gained substantial
visibility this year.
Customer care is more consolidated than many
other BSS and OSS markets, and two vendors,
Oracle and Amdocs, clearly dominate.
However, 50 suppliers command revenue of
several million dollars in this market. Two
vendors, Huawei and AsiaInfo, dominate the
Chinese market and there are many other
smaller, geographically focused suppliers.
The customer care market is driven by greater
competition in the emerging markets, the
increasingly complex services and service
bundles being offered by CSPs, the strong
desire of consumers for instant service, the
increasing need of CSPs to offer many new
services quickly and the need to reduce
customer support costs.
Executive summary
Overall service fulfilment market
shares for 2009
Figure 1: Service fulfilment market shares by revenue,
worldwide, 2009 [Source: Analysys Mason, 2010]
•
Telcordia
10.1%
Oracle
9.5%
Amdocs
9.2%
•
•
Other
56.0%
NEC
7.0%
HP
4.3%
Comptel
4.0%
Total revenue: USD2.233 billion
•
The service fulfilment market generated
USD2.233 billion in revenue in 2009, up by
2.8% from USD2.173 billion in 2008. This
represents slightly more growth than we
forecasted last year (2.3%).
Service fulfilment continues to be a very
fragmented market. The top-six vendors
accounted for only 44% of the market, while
more than 30 other vendors achieved over
USD10 million in revenue.
The service fulfilment market grew more
than some other areas of BSS/OSS since it
is considered to be related to revenue
generation.
Growth in the service fulfilment market was
driven by network evolution towards
optical/packet technology, the push towards
instant availability for complex service
bundles, the need to operate in uncertain
and changing business environments,
deregulation of broadband and mobile in
growth markets and the increasing desire to
meet the needs of SMEs.
International Risk Assessment
Continuum of International Industries
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4-5
Strategic Groups
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4-6
Competitive Matrix
Ericsson
Network IQ™
Company Size
Large
OSI (SRIT)
Service
Assurance
(>$100M)
Medium
($10M-$100M)
IBM
Tivoli Netcool
Customer Experience
Management SW
Agilent + Teradata
Customer Experience
Management System
Nokia
Mobile Quality
Analyzer
TTI
Netrac™
Nexus
Netview
Small
(<$10M)
Network
Service
Arantech
touchpoint™
Customer
Service Quality
Monitoring Viewpoint
7
Proprietary - Mortensen Consulting Group and DAX Technologies
1 February 2008
Example of Strategic Positioning
Chart: Gartner Magic Quadrant
8
Strategic Types
General Types of Strategies –
• Defenders – hold on; cost & market share
• Prospectors – create; innovation
• Analyzers – portfolio; large companies
• Reactors – watch what happens, try to
react quickly and effectively
4-9
Competitive Intelligence
Competitive Intelligence is often called
business intelligence
Gathering information on a company’s
competitors
• Product/offering – features, functionality,
pricing, targets, etc.
•Company – size, profitability, margins,
target markets, apparent strategy, etc.
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4-10
Forecasting
Forecasting Techniques -• Extrapolation – from the past to the future
• Brainstorming – informed people mapping out
possibilities
• Expert opinion – buy reports or commission a
study
• Delphi technique – structured polling technique;
‘The Wisdom of Crowds”
• Statistical modeling – projecting past patterns
into the future
• Scenario planning – a formal technique for
mapping out futures, of various probabilities
4-11
Synthesis of External Factors -- EFAS
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4-12
CHAPTER 5
Internal
Scanning:
Organizational
Analysis
STRATEGIC MANAGEMENT & BUSINESS POLICY
13TH EDITION
THOMAS L. WHEELEN
J. DAVID HUNGER
5-13
Resource-Based Approach to Organizational Analysis
Internal strategic factors -–Critical strengths and weaknesses that are
likely to determine if the firm will be able to take
advantage of opportunities while avoiding
threats
•Resources
•Capabilities
•Competency
•Core competency
•Distinctive competency
5-14
Core and Distinctive Competencies
VRIO Framework -–Value
–Rareness
–Imitability
–Organization
5-15
Resource-Based Approach to Organizational Analysis
5-Step Approach Strategy Analysis -1.
2.
3.
4.
5.
Identify and classify resources
Combine strengths into capabilities
Appraise profit potential of capabilities
Select strategy that best exploits
Identify resource gaps invest in weaknesses
5-16
Continuum of Sustainability
5-17
Sustainability of Advantage
Imitability -–Rate at which a firm’s underlying resources
and capabilities can be duplicated by others
Durability -–Rate at which a firm’s underlying resources
and capabilities depreciate or become obsolete
5-18
Sustainability of Advantage
Core Competency can be imitated -–Transparency
–Transferability
–Replicability
5-19
Business Models
BUSINESS MODEL:
Company’s method
for making money in
the current business
environment.
5-20
Business Models
Types of Business Models -–Customer Solutions Model
–Profit Pyramid Model
–Multi-Component System/Installed Base Model
–Advertising Model
–Switchboard Model
5-21
Business Models
Types of Models -–Time Model
–Efficiency Model
–Blockbuster Model
–Profit Multiplier Model
–Entrepreneurial Model
–De Facto Standard Model
5-22
Value-Chain Analysis
Linked set of value-creating activities
beginning with basic raw material and
ending with distributors getting final
goods into hands of customers
Typical Value Chain for
a Manufactured Product
5-23
Corporation’s Value Chain
5-24
Scanning Functional Resources & Capabilities
Basic Organizational Structures -–Simple structure
–Functional structure
–Divisional structure
–Strategic business units (SBU’s)
–Conglomerate structure
5-25
Basic Organizational Structures
5-26
Corporate Culture
Collection of beliefs, expectations, and
values learned and shared by a
corporation’s members and
transmitted from one generation of
employees to another
5-27
Strategic Marketing Issues
–Market Position & Segmentation
–Marketing Mix
–Product Life Cycle
–Brand & Corporate Reputation
5-28
Product Life Cycle
5-29
Strategic Financial Issues
–Financial leverage
–Capital budgeting
5-30
Strategic Research & Development Issues
–R&D Intensity
–Technological Competence
–Technology Transfer
5-31
Technological Discontinuity
5-32
Strategic Human Resource Management Issues
Human Resources Management
–Increasing use of teams
–Union relations
–Temporary workers
–Quality of work life
–Human diversity
5-33
Internal Factor Analysis Summary Table
5-34