MGT401 (section 3) Fall 2023

Instructor: Sharmin Mahjabin (SHM)

Chapter 3 - Evaluating a company’s external environment
Topic: Business Environment Diagram

immediate / operational

Suppliers opportunity
resellers
and
controllable Business customers
threat
stakeholders
Environment competition
Company Value Factors marketing Intermediaries
mission marketing system
vision
management structure uncontrollable, when
HR outside the
employees organization
Internal External
company image
brand equity
Physical assets Micro
research and development
Technological,
marketing, financial capabilities

Strength
macro
and market
weakness economic
policy
Economic non
Fiscal
Economic

monetary market
economic socio cultural
political
structure
technological
uncontrollable captialist demographic
socialist
mixed PESTLE
economy analysis

socio - cultural - customs, rituals,

1 lifestyle, family structure, society
myths, standards

Demographic - population, age,

2 gender ratio, life expectancy, fertility,
migration

technology - source, impact,

3 development

example studied BD leather 4 political - views, power, philosophy

General/Contextual
MGT401 (section 3) Fall 2023
Instructor: Sharmin Mahjabin (SHM)
Chapter 3 - Evaluating a company’s external environment
Topic: Five Forces Framework

Example Studied:
Bangladesh RMG sector
WALTON
Bharat pe
MGT401 (section 3) Fall 2023
Instructor: Sharmin Mahjabin (SHM)
Chapter 4 - Company’s Resources Capabilities
Topic: VRIN Framework

VRIN framework and VRIO analysis are strategic planning. tools used to help companies
identify certain resources and capabilities that can provide them with a sustained
competitive advantage.

1. Valuable: A resource must help the company create value, either by reducing costs,
increasing revenues, or improving overall performance.
2. Rare: A resource must be uncommon or scarce among competitors.
3. Inimitable: A resource must be difficult or impossible for competitors to duplicate or
imitate.
4. Non-substitutable: A resource must not be easily replaceable by an alternative resource
or capability.

example studied unilever vs. square

prothom alo vs other dailies

Value Chain

or SCM distribution

Distinguish between logistics, SCM, distribution and value chain

 Five generic competitive strategies

chinese brands
Walmart smartphones

MAC cosmetics
Iphone

Figure 1. 1 Porter’s Generic Strategies

Source: Porter (2008, p. 84)
The author will discuss below detail on Competitive Advantage.
Cost Leadership: Its designed to compete with cost and coming with low cost products among
the competitors in mass market. The low-cost advantage sources can vary due to the nature if
the sector or industry such as purchasing process or preferential access to raw materials, and
other factors, etc. The low-cost leadership must explore all the sources that can reduce the cost
from every single perspective.
Differentiation: The main point is to differentiate among competitors and to stand out from the
crowd in mass market. If the business is with differentiation strategy, the product or services will
offer the unique offer in its competitive marketplace so that consumers will notice and valued the
offer. However, there is an important thing that need to be careful is how the consumer
perceived the value and differentiation. In terms of price, the product or services will be come up
with high price that need to deliver the uniqueness to consumers.
Cost Focus: The business coming up with cost focus for niche market and the strategy will figure
out all the sources of cost advantages from supply chain process. Cost focus strategy is simply
coming up with focus on cost to minimize the everything related with cost in focused market. Cost
focus work by adding the contribution of the reducing costs.
Differentiation Focus: it’s the focus on cost of the product or service for focused market or niche
market. Knowing the consumer needs and insights can help think about how to differentiate from
current market and the certain target segment may have different type of uncommon needs.
To imply one of these strategies in business, the required data have to collect by doing research such
as focus group discussion, getting industry report data, news release from business organization,
market analysis, competitor’s analysis, target consumer segment insights etc. The input will employ
how to differentiate the product or services from current market among competitor by focusing on
differentiation or cost will determine.