MidTerm Flashcards
5 Forces Model
Rivalry/Competitors,Threat of New Entry,Bargaining Power of Suppliers,Bargaining Power of Buyers,Substitute Products
Rivalry/Competitors
Companies within the industry you are competing against
Threat of New Entry
Low-High, How difficult it is to be a new entry in the industry
Bargaining Power of Suppliers
Low-High, Number of suppliers - the more suppliers the less power they have
Substitute Products
Products out of the industry that serve the same need
Bargaining Power of Buyers
Low-High, Number of Buyers/Competitors - the more buyers and competitors means less power
Primary Activities
Inbound and Outbound Logistics, Operations, Marketing and Sales, Service
Support Activities
Firm Infrastructure, Human Resource Management, Technology, Procurement
Competitive Strategy
Strategies that allow a business to obtain and maintain a competitive advantage
Cost Leadership
When a company is a category leader for low pricing
Differentiation
What separates your business from another
Focus
Marketing and Selling products to a niche market
3 Conditions of a Good Strategy
A good strategy will help a firm reach its objective.
Will produce a good strategic fit because it makes use of strengths when fighting a threat
Provides a competitive advantage to the company
PESTEL
Political
Economical
Social
Technological
Environmental
Legal
SWOT is not a plan but rather a
Conclusion
The use of resources is called
Capabilities
A capability that is a strength to a company is a
distinctive or core competency
Prisoners Dilemma
Classic example of game theory that shows why 2 competitors may not cooperate. For example, coke and pepsi both have good products they sell for high and make good margins on, if one lowers their price then they make more money and the other makes less, if both lower then they both make less money.
Internal Analysis
Company missions/values, Company background, Company resources, BCG Matrix, Channels of distribution, ABC of Customers, Communication Policy
External Analysis
Environmental Analysis -PEST, Industry Analysis -Porters 5 Forces, Competitive Analysis - Game theory
BCG Matrix
Stars - High Growth Rate High Market Share
Question Marks - High Growth Rate Low Market Share
Cash Cows - Low Growth Rate High Market Share
Pets - Low Growth Rate Low Market Share
ABC Customers
Most important and high spending customers to the most basic customer who is low spending
