Strategy Assignment

Objective

• To conduct a detail strategic analysis of the client firm (Entropy Innovation)

and suggest key decisions to achieve and sustain competitive advantage.

• Please read the case before proceeding further.

• FAS S through W should send their PPT to FAS X for their portion. X may
seek clarification from any FAS group.
 Part 1: Identifying the Company and Competitors [by FAS S]

• Step 1: Compare vision and mission of key players and make conclusion on that.

• Step 2: Compare the key offerings of the client and competitor firms.

• Step 3: Conduct and compare the competitive positioning of the rivals (apply perceptual
map and customer buying criteria mapping).

• Step 4: Compare the importance of the value offerings by rivals [rate it on 1-5; 5 being
very important].

• Step 5: Compare the uniqueness and of the value offerings by rivals [rate it on 1-5; 5
being very unique].

• Step 6: Make key conclusions on the strategy and strategic positioning of the client firm
vis-à-vis the competitors.
Part 2: External Analysis - Analyzing Competitive Environment [FAS T]
• Step 1: Analyze the demand & supply situation in the given industry and its impact on
pricing dynamics.

• Step 2: Analyze industry structure in terms of concentration of market share, profit and
revenue among key players (feel free to make your assumptions)

• Step 3: Conduct the ‘five forces’ analysis for the given industry of the case

• Step 4: Assess the competitive environment by rating the forces on 1 to 5 (5 suggest very
high bargaining power of buyer).

• Step 5: Rate on 1 to 5 how each force can be a threat of increasing the cost and/or
reducing the revenue (price and/or unit sale).

• Step 6: Based on above analyses, prepare a list of possible threats and opportunities
 Steps in Industry Analysis
•What products / services
Define Industry
•Geographic Scope

•Buyers and buyer groups

•Supplier and supplier groups
Identify participants and
•competitors
segment into groups
•substitutes
•potential entrants

Assess force drivers •Drivers of each force - weak/strong: influence firms revenue / profit

•Why is industry profitability so?

Determine industry structure •What are profit controlling factors?
•Analysis consistent with actual ling run profitability?
•More profitable players better off in 5 forces?

•Analyse recent and future changes in forces

Force changes
•Change positive or negative?

•Aspects of industry influenceable?

Possible influences
•By competition, new entrants or by you?
 Part 3: Internal Analysis - Analyzing System Architecture [FAS U]

• Step 1: Identify all the activities/processes of the client and rate each activity/process on 1-5 for their
impact on ‘Reducing Cost’ ‘Increasing Willing to Pay’ and ‘Increasing Unit Sales’.

• Step 2: Categories the activities and processes into key operations / activity-hub and rate each the
activity-hub for their impact on ‘Reducing Cost’ ‘Increasing Willing to Pay’ and ‘Increasing Unit
Sales’ – total the score of each activity under the hub.

• Step 3: Logically connect activity-hubs reflecting causal linkage. Similarly, connect activity under the
activity-hub reflecting causal linkage.

• Step 4: Rate each activity and activity hub on difficult to copy and costly to copy (rate on 1 to 5)

• Step 5: Prepare a table of the sources of competitive disadvantage, parity, temporary advantage and
sustained competitive advantage

• Step 6: Based on above analyses, prepare a list of strengths and weaknesses of the client firm.
 VRIO - Looking Inside For CA

Valuable? Rare? Costly to Exploited by Competitive Implication

imitate organisation

No Competitive Disadvantage

Yes No Competitive Parity

Yes Yes No Temporary Completive Advantage

Yes Yes Yes No Unexploited Completive Advantage

Yes Yes Yes Yes Sustained Completive Advantage

 Part 4: Formulating Strategy to Create and Capture Value [FAS V]

• Step 1: Conduct ‘Relative Cost Analysis’ and rank the rivals accordingly.

• Step 2: Conduct ‘Relative Volume Analysis’ (market share concentration) and rank the relative
position of rivals on volume.

• Step 3: Conduct relative ‘Willing-to-Pay Analysis’ and rank them to understand their ability to
charge premium.

• Step 4: Based on above analysis, map the client as ‘cost leader’, ‘differentiator’ and ‘stuck in
middle’.

• Step 5: Develop a strategic plan to strengthen the competitiveness of the client firm.
 Part 6: Inorganic Growth to Create and Capture Value [FAS W]

• Step 1: Map the value chain of the industry.

• Step 2: Is there any option for the client firm to go for backward or forward integration through
acquisitions and/or alliances (related, vertical, horizontal, geographical integration, unrelated)

• Step 3: Map the possible cost synergy areas if client firm go for any such integration and rate
them on 1 to 5 (1 is low and 5 is high)

• Step 4: Map the revenue synergy in above situation mentioned situation and rate them on 1 to 5
(1 is low and 5 is high)

• Step 5: Map the financial synergy areas in above situation mentioned situation and rate them on 1
to 5 (1 is low and 5 is high)

• Step 6: Foresee the future inorganic growth journey of the client firm.
 Part 7: Suggestions and Conclusion [FAS X]
• Step 1: Based on Part-1 of the assignment, make conclusions on alignment between the vision,
mission and strategic positioning of the firm. What firm is required to do (action plan).

• Step 2: Based on the Part-2 of the project, make conclusions on the strategic positioning of the firm.
What firm is required to do (action plan).

• Step 3: Based on the Part-3 of the project, make conclusions on the external competitive environment
of the firm. What firm is required to do (action plan).

• Step 4: Based on the Part-4 of the project, make conclusions on the internal system architecture of the
firm. What firm is required to do (action plan)

• Step 5: Based on the Part-5 of the project, make conclusions on the strategy of the firm. What firm is
required to do (action plan).

• Step 6: Final conclusion.