ANALISIS LINGKUNGAN INDUSTRI Pertemuan 11 Matakuliah : J0134/ Manajemen Strategik Tahun : 2006 ANALISIS LINGKUNGAN INDUSTRI Pertemuan 11

Industrial Organization (I/O) View – Performing External Audit -- Industry factors more important than internal factors Performance determined by industry forces

Competitive Forces Identifying Rival Firms Strengths Weaknesses Capabilities Opportunities Threats Objectives Strategies

Key Questions Concerning Competitors Their strengths Their weaknesses Their objectives and strategiesTheir responses to external variables Their vulnerability to our alternative strategies Our vulnerability to strategic counterattack Our product/service positioning Should we keep our strategies secret from employees&stakeholders? Entry and exit of firms in the industry Key factors for our current position in industry Sales/profit rankings of competitors over time Nature of supplier & distributor relationships The threat of substitute products/services

Sources of Corporate Information Asosiasi industri Biro riset, exp: AC Nielson, SRI, SWA,dll Moody’s Manuals Standard Corporation Descriptions Value Line Investment Surveys Dun’s Business Rankings Standard & Poor’s Industry Surveys Industry Week Forbes, Fortune, Business Week

7 Characteristics of most Competitive U.S. Firms: Market share matters Understand what business you are in Broke or not, fix it Innovate or evaporate Acquisition is essential to growth People make a difference No substitute for quality

The Five-Forces Model of Competition Potential development of substitute products Rivalry among competing firms Bargaining power of suppliers Bargaining power of consumers Potential entry of new competitors

1.Rivalry Among Competing Firms Most powerful of the five forces Focus on competitive advantage of strategies Influences: Number of competitors Industry growth rate Fixed costs, scale issues Lack of differentiation Low switching costs High exit barriers (specialized assets, emotional commitment, restrictions)

2.Potential Entry of New Competitors Barriers to entry are important: Economies of scale Differentiation/brand loyalty Capital requirements Switching costs Access to distribution channels Other cost disadvantages: Location Raw materials Proprietary technology Quality, pricing, and marketing can overcome barriers

3.Potential Development of Substitute Products Pressures increase when consumer’s switching costs decrease Firm’s plans for increased capacity & market penetration Places an upper limit on prices Consists of products with a similar function Electronic security/security guards DSL/Cable modem Coffee/tea/cola Fax/overnight delivery of documents

4.Bargaining Power of Suppliers Large number of suppliers & few substitutes affects intensity of competition Backward integration can gain control or ownership of suppliers Influences: Their size Number Ability to switch Availability of substitutes Criticality of product Ability to vertically integrate: Suppliers vertically integrate forward

5.Bargaining Power of Consumers Customers concentrated or buy in volume affects intensity of competition Consumer power is higher where products are standard or undifferentiated Outcomes are a function of the relative bargaining power and dependencies of parties Buyers vertically integrate backward Bargaining power is evidenced through Price Quality Service

Results of Industry Analysis To one in the industry --- Unattractive industry: intense rivalry, low entry barriers, strong suppliers and buyers, strong product substitutes Attractive industry: little rivalry, high entry barriers, weak buyers and suppliers, weak product substitutes

Breadth of Product Line The World Automobile Industry: Strategic Groups High Ferrari Lamborghini Porsche Mercedes* BMW Toyota Ford General Motors Chrysler* Honda Nissan Price Hyundai Kia High Low Low Breadth of Product Line