Chapter 4

Question 1

Defining the industry

Answer 1

1) The industry must not be defined to broadly or narrowly.

2) The broader industry value chain needs to be considered. Different industries often operate in different parts of a value chain or value system and should be analysed separately.

3) Most industries can be analysed at different levels, different geographies, market or product/services.

Question 2

Ecosystems

Answer 2

A business ecosystem is an arrangement through which a group of mutually dependent and collaborative partners interact and combine their individual offerings into a coherent customer solution to create value for all.

E.g. Nestles Nespresso with its single-use coffee capsules. Nespresso produces proprietary capsules while some external coffe machine producers like Swiss Jura have permission ro manufacture machines specificall designed to work with the capsule.

Complementors are also part of ecosystems, for example app providers are to Apple and Android smartphones. (not part of core business ecosystems necessarily.

Question 3

Strategic groups

Answer 3

Strategic groups are organisations within the same industry or sector with similar strategic characteristics, following similar strategies or competing on similar bases.

There are many different characteristics that distinguish between strategic groups and these can be grouped into two major categories of strategic dimensions. First the scope of an organisations activities and second, the resource commitment. This suggest that there may be profitability differences between different strategic groups and the differing dimensions can then be the focus of what strategy to pursue. Can be analysed with the help of a chart with R&D on the y-axis and Overseas focus on the X-axis.

Question 4

Market segments

Answer 4

A market segment is a group of customers who have similar needs that are different from customer needs in other parts of the market. When they are small such group are often reffered to as ´niches´.