Welcome to BA495 Business Strategy and Policy .

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Welcome to BA495 Business Strategy and Policy. John A. Hengeveld. Agenda for Today – short day…. Chapter 4-5 of Grant Discussion of Simulation/Q&A. Analyze Strategic Framework. CRITERIA. External Analysis. KSF. Competitive Mapping Customer Value Drivers Sustaining Profitability
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Welcome to BA495 Business Strategy and Policy John A. Hengeveld

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Agenda for Today – short day… Chapter 4-5 of Grant Discussion of Simulation/Q&A

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Analyze Strategic Framework CRITERIA External Analysis KSF Competitive Mapping Customer Value Drivers Sustaining Profitability Global Framework Internal Analysis R/C Competency Rent Earning Potential Resource/Capability Map Strategic Process MAP Strategic Implementation Organizational Structure Process Change Management Implementation Plan Risk Mitigation Implementation Strategic Due Diligence Draft Implementation Congruence R/C Review Competitive Response Risk Identification And Reduction Select Strategic Direction Generate Strategic Alternatives Select Short List v Criteria TOWS Classic Strategic Approaches

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Identifying Key Success Factors by Analyzing Profit Drivers: Retailing Sales blend of items Return on Sales Avoiding markdowns through tight stock control Max. purchasing energy to minimize cost of products obtained ROCE Max. deals/sq. foot through: * area *product blend *customer service *quality control Sales/Capital Employed Max. stock turnover through electronic information trade, close seller connections, quick conveyance Minimize capital sending through outsourcing & renting

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The Contribution of Game Theory to Competitive Analysis Main esteem: Framing vital choices as associations between contenders Predicting results of compeittive circumstances including a couple players Some key ideas: Competition and Cooperation—Game hypothesis can indicate conditions where collaboration more advantagfeeous than comeptition Deterrence—changing the adjustments in the diversion with a specific end goal to prevent a comeptitor from specific activities Commitment—irrevokable demployments of resoruces that give criditability to dangers Signaling—correspondence to influnece a comeptior\'s choice Problems of amusement hypothesis: Useful in clarifying past aggressive conduct—frail in prediucting future competive behaoir. What\'s the issue? — Multitude of models, results profoundly touchy to little changes in suspicions

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A Framework for Competitor Analysis OBJECTIVES What are contender\'s present objectives? Is execution meeting there objectives? How are its objectives liable to change? Procedure How is the firm contending? Forecasts What technique changes will the contender start? By what method will the contender react to our key activities? Suppositions What presumptions does the contender hold about the business and itself? Assets & CAPABILITIES What are the contenders\' key qualities and shortcomings?

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Segmentation Analysis: The Principal Stages Identify key factors and classes. Build a division lattice Analyze section engaging quality Identify KSFs in every portion Analyze advantages of wide versus contract scope. Recognize division factors Reduce to 2 or 3 factors Identify discrete classifications for every variable Potential for economies of degree crosswise over portions Similarity of KSFs Product separation advantages of section center

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*Size *Technical refinement *OEM/substitution The Basis for Segmentation: Customer and Product Characteristics Industrial purchasers Characteristics of the Buyers *Demographics *Lifestyle *Purchase event Household purchasers *Size *Distributor/intermediary *Exclusive/nonexclusive *General/unique rundown Distribution channel Opportunities for Differentiation Geographical area *Physical estimate *Price level *Product highlights *Technology plan *Inputs utilized (e.g. crude materials) *Performance qualities *Pre-deals & post-deals administrations Characteristics of the Product

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Segmenting the European Metal Can Industry

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Segmenting the World Automobile Market REGION US& Canada W.Europe E.Europe Asia Lat America Australia Africa Luxury Cars Full-measure vehicles Mid-estimate cars Small cars Station wagons Passenger minivans Sports autos Sport-utility Pick-up trucks

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Vertical Segmentation & Industry Profit Pools — The US Auto Industry 25% 20 Service & repair Leasing Operating edge 15 Warranty Aftermarket parts Auto fabricating 10 Auto rental Auto protection Auto credits New auto merchants 5 Used auto merchants 0 Gasoline 100% 0 Share of industry income

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SEGMENT Segmentation and Key Success Factors in the U.S. Bike Industry KEY SUCCESS FACTORS * Low-costs through worldwide sourcing of parts & low-wage gathering. * Supply contract with real retailer. Driving contenders: Taiwanese & Chinese constructing agents, some U.S makers, e.g. Murray Ohio, Huffy Low value bikes sold principally through office and rebate stores, for the most part under the retailer\'s own particular image (e.g. Singes\' "Free Spirit"); *Cost effieciency through vast scale operation and either low wages or mechanized assembling. *Reputation for quality (sturdiness, unwavering quality) through compelling advertising to merchants and additionally purchasers. * International advertising & dissemination. Driving contenders: Raleigh, Giant, Peugeot, Fuji Medium-evaluated bikes sold essentially under producer\'s image name and conveyed for the most part through expert bikes stores; *Quality of segments and get together, Innovation in plan (e.g. minimizing weight and wind resistence). *Reputation (e.g. through accomplishment in hustling, through compelling brand administration). *Strong merchant relations. Costly bikes for lovers. Youngsters\' bikes (and tricycles) sold fundamentally through toy retailers (rebate toy stores, retail establishments, and authority toy stores). Like low-value bike section.

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Strategic Group Analysis A key gathering is a gathering of firms in an industry taking after the same or comparative procedure. Recognizing vital gatherings: Identify chief vital variables which recognize firms. Position every firm in connection to these factors. Recognize bunches.

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Strategic Groups in the World Automobile Industry Broad GLOBAL, BROAD-LINE PRODUCERS e.g., GM, Ford, Toyota, Nissan, Honda, VW, Daimler Chrysler REGIONALLY-FOCUSED BROAD-LINE PRODUCERS e.g. Fiat, PSA, Renault, GLOBAL SUPPLIERS OF NARROW MODEL RANGE e.g., Volvo, Subaru, Isuzu, Suzuki, Saab, Hyundai NATIONALLY FOCUSED, INTERMEDIATE LINE PRODUCERS e.g. Tofas, Kia, Proton, Maruti PRODUCT RANGE LUXURY CAR MANUFACTURERS e.g., Jaguar, Rolls Royce, BMW NATIONALLY-FOCUSED, SMALL, SPECIALIST PRODUCERS e.g., Bristol (U.K.), Classic Roadsters (U.S.), Morgan (U.K.) PERFORMANCE CAR PRODUCERS e.g., Porsche, Maserati, Lotus Narrow National GEOGRAPHICAL SCOPE Global

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Strategic Groups Within the World Petroleum Industry INTERNATIONAL UPSTREAM COMPANIES INTEGRATED OIL MAJORS INTERNATIONAL UPSTREAM, REGIONALLY FOCUSED DOWNSTREAM Premier Oil Enterprise Kuwait Petroleum PDVSA INTEGRATED DOMESTIC OIL COMPANIES NATIONAL PRODUCTION COMPANIES Iran NOC 0 0.5 1.0 1.5 2.0 Statoil BP-Amoco Exxon - Mobil Vertical Balance INTEGRATED INTERNATIONAL MAJORS Pemex Petronas Chevron Royal Dutch - Shell Gp. Phillips ENI Elf-Fina-Total Repsol YPF Indian Oil Phillips Texaco Petrobras ENI INTERNATIONAL DOWNSTREAM OIL COMPANIES Repsol Nippon E.g. Neste Tosco 0 10 20 30 40 50 60 70 80 NATIONALLY-FOCUSED DOWNSTREAM COMPANIES Geographical Scope

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Analyzing Resources & Capabilities The part of assets and abilities in procedure definition. The assets of the firm Organizational capacities Appraising the benefit capability of assets and abilities Creating new capacities . Layout

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Shifting the Focus of Strategy Analysis: From the External to the Internal Environment THE FIRM Goals and Values Resources and Capabilities Structure and Systems THE INDUSTRY ENVIRONMENT Competitors Customers Suppliers STRATEGY The Firm-Strategy Interface The Environment-Strategy Interface

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Rationale for the Resource-based Approach to Strategy When the outside environment is liable to quick change, interior assets and abilities offer a more secure reason for procedure than market center. Assets and abilities are the essential wellsprings of gainfulness

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The Evolution of Honda Motor Company 50cc 2-cycle motor Related items: ground tillers, marine motors, generators, pumps, cutting tools Founding of Honda engine organization 405cc engine cycle 4 cycle motors 1948 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 First item: cut on motor for bikes The 50cc super - offspring N360 small scale auto 1000cc Goldwing visiting engine cycle Acura Car division

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Canon: Products a nd Core Technical Capabilities Precision Mechanics Fine Optics Plain-paper copier Color copier Color laser copier Laser copier 35mm SLR camera Compact design camera EOS self-adjust camera Digital camera Video still camera Basic fax Laser fax Inkjet printer Laser printer Color video printer Mask aligners Excimer laser aligners Stepper aligners Calculator Notebook PC Micro-Electronics

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Evolution of Capabilities and Products: 3M Road signs & markings Videotape Sandpaper Carborundum mining Floppy plates & information stockpiling items Scotchtape Audio tape Acetate film Post-it notes Housewares/pack chen items PRODUCTS Surgical tapes & dressings Pharmaceuticals Materials sciences Flexible hardware Health sciences CAPABILITIES Microreplication New-item advancement & presentation Thin-film advances Abrasives Adhesives

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The Links between Resources, Capabilities and Competitive Advantage INDUSTRY KEY SUCCESS FACTORS COMPETITIVE ADVANTAGE STRATEGY ORGANIZATIONAL CAPABILITIES RESOURCES TANGIBLE INTANGIBLE HUMAN Financial Physical Skills/know-how Capacity for correspondence &

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