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Situation Analysis

Situation Analysis. Hierarchy of External Influences. P olitical/Legal E conomic S ocio-Cultural T echnical G lobal. Remote Environment. Competitive Environment. Firm. Five Forces Competitors Industry Structure Strategic Groups Political/Legal. Industry Vital Statistics.

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Situation Analysis

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  1. Situation Analysis

  2. Hierarchy of External Influences • Political/Legal • Economic • Socio-Cultural • Technical • Global Remote Environment Competitive Environment Firm • Five Forces • Competitors • Industry Structure • Strategic Groups • Political/Legal

  3. Industry Vital Statistics • Industry scope: How is the industry defined? What are its boundaries? • General: Size, growth rate • Key Players: Rivals, customers, suppliers, government agencies • Structure: Fragmented vs. concentrated; vertically integrated, etc. • Performance: Profit levels, trends, distribution of, variability of

  4. Life Cycle StageGrowth is Good Growth Rate Time

  5. Innovation Cycle TimeSlow is good, unless you’re the one driving innovation Growth Rate t1 t2 t3 Time

  6. Concentrated Structure Fringe Players Dominant Player No. 2 Concentrated is good, if you’re No. 1 or No. 2 …or, if you’re a smaller player in a protected niche

  7. Fragmented Structure No Clear No. 2 Multiple Players No Dominant Player Fragmented is good, if you’ve got the best strategy/technology

  8. Porter’s Five-Forces of Industry Analysis Threat of New Entry (+) or (-) or no influence on... Profit = (P – C) x Qty. Intensity of Rivalry Bargaining Power of Suppliers Bargaining Power of Buyers Threat of Substitute Products

  9. Intensity of Rivalry Among Existing Competitors Plays out in the following ways: Jockeying for strategic position * Price competition * Advertising wars -- Coke vs. Pepsi * Increasing consumer warranties or service * * • New product introductions – Cheerios cereal (14 types) • Regular Cheerios • Apple-Cinnamon Cheerios • Honey-Nut Cheerios • Frosted Cheerios • Three-Grain Cheerios • Cheerios with Berries (blueberry, strawberry, banana, mixed) • Yogurt Cheerios (vanilla or straw) • Fruity Cheerios (like Fruit Loops, only healthier)

  10. Situation Analysis Summary Grid

  11. Situation Analysis – Newspapers             

  12. Strategic Map Strategic Dimension / Coordinate #2 Strategic Dimension / Coordinate #1

  13. Strategic Map: Beer (Pre-light / Pre-microbrew) Dark/Full Amber Regular Light Low Price High Price

  14. Strategic Map: Beer (Current) Guinness Blackened Voodoo Anchor Porter Dark/Full Killian’s Brown Lowenbrau Dark Amber Bock Lowenbrau Amber Regular Sam Adams Bass Ale Pilsner Urquell Killian’s Red Red Wolf Bud Miller Old Swill Light Milwaukee’s Best Light Miller Lite Bud Light Amstel Cardinal Low Price High Price

  15. Strategic Map: Beer-like Beverages? Guinness Blackened Voodoo Anchor Porter Woodchuck Cider Dark/Full Mike’s Hard Lemon Amber Regular Sam Adams Bass Ale Pilsner Urquell Killian’s Red Red Wolf Smirnoff Ice Bud Miller New Strategic Dimension Milwaukee’s Best Light Light Low Price High Price

  16. Situation Analysis of Coffee Industry Major Rivals: Major Products: Customer Segments: Other Characteristics:

  17. Situation Summary Grid –Coffee Industry

  18. Strategic Map of Coffee Industry Strategic Dimension #2 Strategic Dimension #1 Don’t use Price as a dimension

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