Strategy Analysis Flashcards
Strategy analysis
> Firms value comes from its ability to earn a return above the cost of capital
Industry analysis
> Before assessing forms profit potential, first necessary to assess profit potential of each industry
Price is the level of competition among suppliers of the same or similar products
Five forces model
> Rivalry among existing firms
Threat of new entrants
Threat of substitute products
bargaining power of buyer/supplier
Competitive strategy analysis
> Cost leadership: allows firms to supply same product at lower cost
Differentiation: identify and attribute that customer’s value
Corporate Strategy analysis
> many companies operate in multiple business
when analysing a multi business, need to examine industry, competitive strategy of individual business units and economic consequences of managing all the different business
