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REDHAT: Identifying Competitive Advantage and Revenue Streams

REDHAT: Identifying Competitive Advantage and Revenue Streams. Key Issues. Definition of “industry” Definition of “product” Source of revenues Liability of newness and small size Rivalry vs. commensalistic co-existance. Financial Highlights. RHAT Stock Price. $150. $20. Aug 1999.

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REDHAT: Identifying Competitive Advantage and Revenue Streams

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  1. REDHAT:Identifying Competitive Advantage and Revenue Streams

  2. Key Issues • Definition of “industry” • Definition of “product” • Source of revenues • Liability of newness and small size • Rivalry vs. commensalistic co-existance

  3. Financial Highlights

  4. RHAT Stock Price $150 $20 Aug 1999 Sept. 2000

  5. Opportunities: Threats: External Analysis

  6. General Environmental Forces • Social • Political • Technological • Global • Legal • Economic • NET EFFECT?

  7. Competitive Environment Threat of New Entrants Threat of New Entrants Rivalry Among Competing Firms in Industry Bargaining Power of Suppliers Bargaining Power of Buyers Threat of Substitute Products

  8. Strengths: Weaknesses: Internal Analysis

  9. Where is Revenue Stream? Firm Infrastructure Human Resource Management MARGIN Technological Development Procurement Service Inbound Logistics Marketing & Sales Outbound Logistics Operations

  10. Market for Fragmented “Product” Programmer- Customers Mainstream Customers

  11. Market for Fragmented “Product” Programmer- Customers Mainstream Customers

  12. Market Maker Programmer- Customers REDHAT Mainstream Customers

  13. Network Centrality as Advantage Programmer- Customers Debian REDHAT Mainstream Customers Applications Vendors

  14. Mission and Goals • Mission/vision: • Define industry, values, customers, etc. • Overall strategic approach • Goals: • Financial • Strategic

  15. Source of Competitive Advantage Cost Uniqueness Cost Leadership Broad Target Market Different. Breadth of Competitive Scope Focused Different. Focused Low Cost Narrow Target Market

  16. Strategic Recommendations • Do XX • Value chain activity ‘a’ • Value chain activity ‘b’ • Result: Eliminates vulnerability to SWOT • Do YY • Value chain activity ‘a’ • Value chain activity ‘c’ • Result: Establishes differentiated competence and revenue stream

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