Professional Documents
Culture Documents
than Others.
Differences in Profitability W ithin Selected Industries
S e m ic o n d u c to r In d u s tr y
InteROE
l - Pharmaceutical Industry 1989
50% M o to ro la
AMD
40%
A na lo g D e vic e s
30%
N a tio na l S e m ic o nd uc to r
20%
-5 0 5 10 15 20 25
10%
O p e rating inc o m e / as s e ts , 1 9 8 8 -9 5 (% )
0%
Amgen AMP Eli Lilly Merck Mylan Pfizer
S ource: P ankaj Ghem aw at and Jan W . R ivkin, “C reating C om petitive Adva ntage ”
3
The Structure-Conduct-
Performance Paradigm
• The Causal View
Market Conduct Performance
Structure
Exhibit 3.2
© McGraw Hill
The Five Forces Model
Exhibit 3.3
SOURCE: Michael E. Porter, “The five competitive forces that shape strategy,” Harvard Business
Review, January 2008.
Copyright © 2017 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution
in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Competitive Forces and Firm Strategy
• Power of Suppliers
• Power of Buyers
• Threat of Substitutes
• Economies of Scale
10