Netflix Analysis

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 Intensity/Impact of Forces
High Low Major Thread Major
Opportunity
Strong competitors of Innovation
Thread of New Entrants Medium-High traditional related
industries (movies,
TV)

Medium-high Lack of differentiation Development of

Substitute products technology/innovation

Very powerful Development of new

Power of Suppliers Medium-High suppliers (some of suppliers
them)

X Low switching cost innovation, take

Power of Buyers advantage of
branding/ pioneer

X Agressive strategic Innovation, look for

Intensity of Rivalry action for competitors differentiation

Positive? Negative? The generation of new Develop a strategy

Complementary Products x competitors which includes the use
associated with of electronic
existing competitors commerce in this
platforms
An extension of
Porter’s Five
Forces

https://www.youtube.com/wat
ch?v=Hq0zb3VXggM
Industry analysis and internal analysis
• The industry analysis lead us
to the next step of strategy
analysis: Capability Analysis
• How the capabilities fit
respect to threads and
opportunities in the industry
• Industry analysis gives you a
strong basis for thoughtful
judgment and a platform to
see the industry
The industry life cycle

-Industry structure
analysis can be
easily become too
static
-Competitive forces
change over time,
key drivers can alter
industry structures
and scenario
analysis
Cycles of competition

Industry Structures
are not natural, but
are often created and
reshaped by the
deliberate strategies
of competitors
 Comparative industry structure analysis
• Identifies the attractiveness of
industries.
• Identifies strategies to influence
the impact of the forces.
• Helps to Identify Strategic groups
(organisations within an industry
or sector with similar strategic
characteristics)
• Identifies the type of Industry:
Monopolistic, Oligopolistic,
Perfectly competitive or
Hypercompetitive
 Types of Industries
• Monopolistic industries - one firm and therefore no
competitive rivalry. A firm has ‘monopoly power’ if it has a
dominant position in the market.
• Oligopolistic industries - dominated by a few firms with
limited rivalry and in which firms have power over buyers
and suppliers.
• Perfectly competitive industries - barriers to entry are low,
many equal rivals each with very similar products, and
information about competitors is freely available. Few (if any)
markets are ‘perfect’ but may have features of highly
competitive markets.
Types of Industries

•Hypercompetitive industries - where the frequency, boldness and

aggression of competitor interactions accelerate to create a
condition of constant disequilibrium and change.
•Hypercompetition often breaks out in otherwise oligopolistic
industries (e.g. mobile phones).
•Organisations interact in a series of competitive moves in
hypercompetition which often becomes extremely rapid and
aggressive as firms vie for market leadership.
I wonder...
 Analyzing Competitors-Strategic Groups
• A strategic group consist of those industry
members with similar competitive approaches
and positions in the market.
• A group of organizations that employ the same or
similar strategies in a particular industry.
• These groups show similar behaviour along key
strategic dimensions: product-line breadth, sell in
the same price/quality range, employ the same
distribution channels, depend on identical
technological approaches, compete in much the
same geographic areas or offer buyers essentially
the same product attributes or similar services
and technical assistance.
 Analyzing Competitors-Strategic Groups
• These groups show similar behaviour along
key strategic dimensions
• Porter discovered that individual strategic
group members face similar threats and
opportunities in the competitive market.
Furthermore, similar resource configurations
form protective barriers around the strategic
groups.
• The industry may consist of several or only
one strategic group. A strategic group may
consist of one or more members.
(Müller-Stewens 2005)
 Analyzing Competitors- Criteria for identify
Strategic Groups
To distinguish between strategic groups within a sector and to analyse the differences in their
behaviour, the following criteria can be used (Müller-Stewens 2005):
•Vertical and horizontal integration;
•Geographical market segmentation
•Ownership structure Make sure you
•Company size use criteria,
•Capacity utilization which are of high
•Cost structure importance in
•Sales channels terms of the
•Marketing activities behaviour of
•Brand ownership your competitors!
•Product diversity
•Product quality
•R & D capability
 Strategic Group Map
In order to visualize
Strategic the segmentation of
Group 3 strategic groups, it
is useful to design a
Competitor 3 "map"
Competitor 4 Strategic (Müller-Stewens
Variable 2 Group 2
2005) or a matrix
Competitor 5
using two or more
Competitor 6 criteria to classify
Competitor 2
the strategic groups
Competitor 1

Strategic
Group1 Variable 1
Strategic groups

High

Price

Low
Low Diversity of Models High
Strategic Group Map-Exercise in class
Variable 1 vs.

Variable 1
Variable 2
Strategic
Groups

Variable 2