STRATEGIC MANAGEMENT REVISION CHAPTER-4 STRATEGIC MANAGEMENT - PowerPoint PPT Presentation

STRATEGIC MANAGEMENT REVISION CHAPTER-4

STRATEGIC MANAGEMENT REVISION CHAPTER-4

STRATEGIC MANAGEMENT iv) Bargaining Power of Supplier earning attractive pro�its of the �ive competitive forces is conductive to Step 3 : Determine whether the collective strength each of �ive forces are Step 2 : Evaluate hour Strong the pressure comprising Step 1 : Identify Pressures associated with each force v) Bargaining Power of Buyer iii) Threat of Substitute Product REVISION ii) Threat of New entrant i) Rivalry among �irm Process (Steps) Forces Michael Porter 5 Forces Model COMPETITION ANALYSIS CHAPTER-5 3 Steps

STRATEGIC MANAGEMENT • Reduced per-unit cost • Cartel Formed by Buyer • Big Buyers • Knowledge of Substitutes • Number of Buyers • Undifferentiated Products Bargaining Power of Suppliers q Factors In�luencing: • Volume of Purchase • No. of Suppliers • Availability of resource • Unavailability of Substitutes • High Switching Costs Economies of Scale • High volm at lower cost q Product Differentiation Physical or perceptual difference in eye of cust. Switching Cost High Cost " Brand Identity of product " Infrequent " Vantly Purchased Product Brand Identity Access to distribution channel Unavailability of distribution Channel to New Entrant Aggressive retaliation : Through Factors In�luencing q REVISION May reduce pro�itability CHAPTER-5 Rivalry Tends to be cut throat and pro�itability low when: i) Now Clear leader ii) Competitors in industry are numerous iii) Competitors operate with high �ixed cost iv) High exit bemeans v) Little Opp. to differentiate offerings vi) Industry faces slow growth RIVATRY AMONG FIRM q Threat of New Entrants Powerful source of competition Pressures in terms of: In�luence Price & Quality * Advance Technology Bargaining Power of Buyers q * Ease of use * Availability * Useful Life * Price Pressures: u Product range Threat of Substitute Product Larger Capital Requirement Capital Requirement u Brand Image u Big Size �irm u Low Price pricing, advertising etc.

STRATEGIC MANAGEMENT REVISION CHAPTER-5 COMPETITIVE STRATEGY