Strategy: A View from the Top
Group 5
Dougless Hentges
Austin Mapes
David Murdock
Cindal Peterson
Molly Redden
 Products
 Customers
 Geography
 Stages
in the production-distribution
pipeline
Potential
Entrants
Threat of new
entrants
Bargaining
power of
suppliers
Industry competitors
Bargaining
power of
buyers
Buyers
Suppliers
Rivalry among
existing firms
Threat of
substitute
products or
services
Substitutes
 Process
of slow, gradual change
 Models
can help us understand how and
why industries change
 Not
like structural change
 Radical,
progressive, creative, and intermediating
 Two
types of obsolescence define these paths of
change:


Threat to industry’s core activities
Threat to industry’s core assets
 Radical-
Core activities and core assets
threatened at the same time
 Progressive- Most Common form, neither
core activities or assets are threatened
 Creative- Core assets threatened, core
activities not
 Intermediating- Core activities threatened
but core assets not
 Analyze
change in terms of vertical
structure to horizontal or vice versa


Changes in degree of industry concentration
Increase or decrease in degree of product
differentiation
 Three

industries:
Telecommunications, computers, and television
 “Rule
of Three and Four”
 Introduction
 Growth
 Maturity
 Decline
 Technological

Competition for the standard
 C.K.

standards
Prahalad Model:
Three phases for industry evolution
 Globalization
 Segmentation
 Competitor
 Strategic
Analysis
Groups
 Strategic
Segmentation
 Customer
 Product
Characteristics
or service related variables
1.
2.
3.
4.
5.
Who are our firm’s direct competitors
now and in the near term?
What are their major strengths and
weaknesses?
How have they behaved in the past?
How might they behave in the future?
How will our competitors’ actions affect
our industry and company?
 Numerous
Competitors
 Rivalry
 Fast
food, Pharmaceuticals
 Market
1.
2.
3.
4.
5.
6.
7.
Analysis
Actual and potential size of market
Market and segment growth
Market and segment profitability
Underlying cost structure and trends
Current and emerging distribution systems
Regulatory issues
Technological changes
 Growth
Vector Analysis
Product Options
Present
Markets
Market
Options
Future
Markets
Present Products
Future Products
Concentration
(Fender)
Product
Development
Market
Development
Diversification
(Yamaha)
 Gap

Analysis
Can identify additional avenues for growth
•
Profit Pool Analysis
–
•
Profit pool: total amount of profit earned at all
points along the industry’s value chain
Four Steps
1.
2.
3.
4.
Define pool’s boundaries
Estimate its overall size
Allocate profits to the different value chain
activities
Verify Results